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Wednesday, January 19, 2011

What difference will the Amazon and LOVEFiLM deal make to the mobile industry?

Mark Bridge writes:

If you’ve read any of the tech press today you’ll have seen that is buying LOVEFiLM. Yes, that really is how the company writes its name. Amazon already had quite a collection of LOVEFiLM shares, so it’s really just buying the remainder.

LOVEFiLM, in case you’ve missed the TV ads and online promotions, does DVD rental by post and also streams video over the internet. Oh, and it does games rental as well.

Needless to say, both companies have issued statements saying how great it is for them and their customers. “We look forward to a productive and innovative future”. “We can significantly enhance our members’ experience across Europe”.

But what does all this mean to the mobile industry?

Well, has interviewed LOVEFiLM CEO Simon Calver and Amazon VP of EU retail Greg Greeley in an article headlined “Lovefilm and Amazon to bring movies to your phone”. Although neither man explicitly says they’re planning this, it certainly seems an obvious next move for the online side of the business.

In fact, if you’ve been following the LOVEFiLM Twitter feed, you’ll know that just yesterday the company Tweeted “We have a number of exciting developments underway for mobile devices in 2011, more news available soon” in reply to a question.

However, the idea of streamed movies on smartphones – as opposed to downloads – raises the usual questions about data. LOVEFiLM (the novelty of that lower case i is starting to wear thin!) says an average video stream over your home broadband will transfer approximately 500MB of data for a 90 minute film. That’s your entire T-Mobile ‘fair usage’ allowance for a month.

Is that realistic for mobile devices?  Well, US-based video streaming service Netflix – arguably one of the reasons Amazon decided to snap up LOVEFiLM – has an iPhone and iPad application. A quick look at various online figures suggests the ‘500MB per film’ figure sits somewhere towards the higher end of individual mobile experiences.

It’s possible to adjust video quality (and therefore data usage) based on connection speed and type, so the cost of video streaming needn’t be quite as scary as it first seems.

Yet without higher or truly unlimited mobile data allowances, it’ll still be a luxury to download full-length movies to mobile phones.

Will the Amazon and LOVEFiLM deal affect the mobile industry?  Almost definitely, I’d say. Will it make a big difference?  It’s much harder to answer that one.

With current tariffs, I’d say no. But just imagine a colour-screen Kindle with the same kind of inclusive mobile data deal available on the company’s current eBook reader. Watch out, iPad – the LOVEFiLM tablet could be on the way!

Author: The Fonecast
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