Netflix: ‘Lovefilm is no competition’

The popular US streaming service, which is now available to everyone in the UK and Ireland for £5.99 a month, is confident that its “breadth of choice”, “quality of streaming” and personalisation technology, will ensure it enjoys the same type of success it has had in the US.

Reed Hastings, Netflix’s chief executive, who was in London to launch the service, told The Telegraph: “We offer a much better user experience than Lovefilm with HD video streams available. We are on more platforms, such as Nintendo Wii and we have a broader content offering.”

Unlike Lovefilm, which offers a postal DVD service and a newer more limited streaming service, Netflix UK is a streaming only service.

The team has done content deals with ITV and Channel 4, as well as with BBC Worldwide and MGM films. Whole seasons of programmes such as Torchwood, Fawlty Towers, The Inbetweeners and older episodes of Coronation Street, will be available through it.

There is also a collection of films available through the site. Initial analysis by The Telegraph suggests that the launch movie catalogue is not significantly larger than other rival streaming services. For instance, a search for ‘Martin Scorsese’ films only returns three results and they are not even the most recent titles the award-winning director has made.

However, the company refuses to disclose how many titles it offers but says the amount will rapidly increase over the coming months.

Lovefilm has around 1.6 million customers in the UK, according to Enders Analysis estimates, which is a mixture of its DVD rental subscribers and streaming only.

Ted Sarandos, Netflix’s chief content officer, bullishly told The Telegraph, that Lovefilm was no competition for Netflix because it was “too complicated”.

“We only offer one package and one price point. Lovefilm offers too many options. We are very comfortable going after the same audience and product because we are specialists in what we do. No one ever failed for being specialised,” he said.

Netflix, which has more than 20 million subscribers in the US, is offering a free month-long trial to all UK users. Britons can either log into the service using their Facebook account details or their email addresses.

Hastings described Sky Movies as its other major rival in the UK, as the company has an incredible dominance over movie rights in the country, with deals in place with all of six of the major Hollywood studios.

“But we can compete, especially on price. Our service is £5.99 and Sky’s is £16. We are focused on ‘one click play’ on any device,” he explained.

Next year Netflix, which is also starting to invest in producing its own content, (with a remake of House of Cards underway); will invest $1bn into US content alone.

Hastings said he expected to turn a profit from the UK market within the next two years, and wanted to attract “several million subscribers”.

Netflix is available on PlayStation 3, the Nintendo Wii, Microsoft’s Xbox 360, a variety of smart TVs, computers, the iPhone and the iPad.

Neil Hunt, Netflix’s chief product officer, said that Netflix’s algorithms begin to learn what type of content each user likes and starts serving personalised suggestions based on each subscriber’s viewing history, their star ratings of films they have watched and enjoyed and a taste test they take when signing up.

If the user has also logged in with their Facebook details, they will also be shown what their two closest friends have been watching lately when they load Netflix.

“We have also developed adaptive streaming which means we use a low bit rate when a film is loading so it can go quickly and then ramp it up when there is enough bandwidth to support HD. We react to bandwidth availability,” he explained.

No special broadband rate is required to load content.

Netflix will not be opening a UK office, instead opting to run the new operation from its headquarters in California.