Poised to capitalise on the new TV platforms that will take its movie rental service to millions of new customers, Lovefilm is making two interesting additions to its board.
Playfish CEO Kristian Segerstråle, who has been impressing folks on the circuit since selling his company to Electronic Arts (NSDQ: ERTS) in particular, and Roland Steindorf, head of German ISP Verstael’s supervisory board, are joining as non-executive directors.
Lovefilm hired former BSkyB (NYSE: BSY) channels director and founding Kangaroo CEO Lesley Mackenzie in March to be its group digital officer and hired GMG’s group digital strategy director Simon Waldman in May to be its group product head.
The company has been formed through a series of mergers of Netflix (NSDQ: NFLX) DVD rental clones including Online Rentals Ltd, Screen Select, DVDSOnTop, Video Island, DVDS365 and Webflix.
But it’s the online opportunity that could prove greatest for Lovefilm. Not only is it now beginning to offer movie rentals to small computer screens; it also also getting carriage on connected-TV platforms including Samsung Internet@TV and Sony Internet TV, and will likely be a featured service on Canvas-compatible boxes and TVs.
I think Lovefilm could end up challenging Sky Movies and Filmflex, carried on Virgin Media (NSDQ: VMED), as one of the leading distributors of on-demand movies to UK TVs, giving it sufficient scale for a possible future IPO or becoming an acquisition target for candidates like Netflix itself.
Index Ventures, Balderton Capital and DFJ Esprit are the venture investors on board; Arts Alliance Ventures has an interest; and Amazon (NSDQ: AMZN) is now Lovefilm’s largest shareholder after a 2008 deal in which Lovefilm acquired Amazon’s UK and German DVD rental business.
In fact, Lovefilm appointed an investment bank last year to deal with what were reported to be several offers for part of the company. Lovefilm had taken £10.5 million in debt funding from Lloyds to kickstart its VOD venture last year.