Lovefilm has been one of the UK's biggest tech success stories. Since its launch in the early '00s, the company has grown to a consumer base of 1.8 million with over 70,000 titles available to rent.
These sorts of numbers were more than enough to make Amazon sit up and take notice, with the online retailer acquiring Lovefilm in 2008.
While this means the company is in good shape, 2012 is set to be a landmark year for movie distribution services as a whole as it will mark the launch of Netflix in the UK. Although it won't be competing with Lovefilm when it comes to physical disc rentals, Netflix will be encroaching on the company's burgeoning streaming business.
We are already seeing sides being taken when it comes to exclusive online rights, with Lovefilm snapping up Warner and Netflix nabbing a number of independents and MGM.
But healthy competition is something Lovefilm has had to put up with from its inception, as Simon Morris, chief marketing officer for Lovefilm, explained to TechRadar when we chatted to him recently.
"From the day we started, competition was intense. High street rental was our biggest competition back in the day," said Morris.
"That industry was very aggressive and arrogant. Their problem was that they weren't customer focused, they were competitor focused. We focused on range, choice and convenience."
Given the state of the high street at the moment, it seems that arrogance has turned to fear, with many established high street brands trying to remodel themselves for a consumer that predominantly shops online.
It's no surprise that HMV decided to launch its own on-demand movie service recently but it is now playing catch-up in an industry it once dominated.
"This is very much a hybrid world," agreed Morris. "Customers want physical goods and digital and we are well poised to offer this."
iPlayer changed the game
But Morris believes that UK consumers wouldn't be so quick to look to streaming as a way to consume content if it wasn't for the BBC.
"With the iPlayer, the BBC did a great job of changing consumer behaviour and we have benefited from that – they normalised the idea of catch-up TV.
"The service went a long way to explaining to middle England that streaming content was normal."
While streaming may seem the norm now, Lovefilm has had a chequered history with the technology which goes as far back as 2006.
"We were experimenting – we did the world's first download to own in 2006 with King Kong."
But this didn't automatically bring viewers in – and in 2009 Lovefilm stopped offering a standalone subscription digital download service, something Morris believes was down to customer confusion with digital at the time.
"There's the customer, the supplier and the infrastructure and I don't think the infrastructure was right. The customer didn't know what they wanted, whether it was ownership they were after or streaming."
Today, Lovefilm offers around 5,000 titles on an on-demand basis with this service bolstered by the introduction of Lovefilm apps on the PS3 and iPad.
Curation is key
But its not the way movies are distributed that Morris believes is key, but the curation of the content you have.
"I love continuously looking at new ways of getting stuff to people. When it comes to browsing films at retail, it can be about shelf space – but we can go through the archive and look at older films and try to make them popular.
"The DNA of choice means that blockbuster titles are always shared, but then there is more eclectic stuff."
But it is not just down to those who work behind the scenes, Lovefilm also relies heavily on its users.
"We editorialise, we're challenging traditional genres and we've found that masses of data helps people find things.
"But there is nothing as powerful as customer recommendation."
With Netflix just around the corner, Sky and Virgin focusing hard on on-demand movies and Sony offering movies through the PS3 and its connected TV services, consumers are soon going to be spoilt for choice when it comes to where they get their movies from - but this isn't something Morris is phased about.
"We have existed in a world of good competitors; the UK is a crucible of consumer activity.
"But we pioneered in post, we pioneered in downloads as early as 2005 and we now believe we are pioneering with streaming.
"Whatever the winning technology we will be there but at the heart we are still the same DNA - we absolutely love film...
"...sorry, I know that's cheesy but it's true!"
