LOVEFiLM .com have just announced are taking over the user base of all of Amazon.co.uk and Amazon.de DVD rental service.

A press release from LOVEFiLM has just announced that LOVEFiLM have acquired Amazon’s DVD rental business and customer base. In the deal Amazon has now become the largest shareholder of LOVEFiLM for an undisclosed amount of cash investment.

This take over by LOVEFiLM of a part of Amazon’s service is likely to send ripples throughout the entertainment and internet industries, as it is the 1st time that Amazon have sold off part of their business. LOVEFiLM will now be shown to be one of the major leaders of the Entertainment sector in the UK and Germany.

The switch for Amazon customers into the new LOVEFiLM customers is rumoured to be in the next 2-3 months, all DVD rental’s for both companies will go on as usual till this point.

So what for the future?.. Well now that LOVEFiLM is going to take it’s UK subscriber base from an estimated 500,000 to 900,000 no doubt they will be looking to break the 1million mark. LOVEFiLM have been the number one online DVD rental store in the UK for a couple of years now, so where does this leave Blockbuster in the next few months?.. I would hazard to guess that LOVEFiLM will either buy them out or just take them out of the UK for all entertainment rentals.

Full press release below.

LOVEFiLM to Acquire Amazon’s UK and German DVD Rental Business;
Amazon to become largest shareholder of LOVEFiLM

Luxembourg, February 4, 2008 – (BUSINESS WIRE) – Amazon.com (NASDAQ: AMZN) and LOVEFiLM International (www.lovefilm.com), today announced that LOVEFiLM will acquire Amazon Europe’s DVD rental business in the United Kingdom and Germany. As part of this transaction, Amazon Europe will also make a cash investment and become the largest shareholder in LOVEFiLM International Ltd., and finally, the two companies will enter into a multi-year marketing agreement in which Amazon Europe will promote LOVEFiLM’s services on its sites for UK and German customers.

Completion of the deal is subject to regulatory approval in the UK and Germany. Following completion of this deal, the new LOVEFiLM subscriber base will total over 900,000 customers predominantly in the UK and Germany, but also in the Nordics (Sweden, Norway, and Denmark).

“As one of Europe’s largest online DVD rental businesses, LOVEFiLM is well established to serve customers’ increasing demand for entertainment,” said Greg Greeley, Amazon’s vice president of European retail. “Our investment will enable LOVEFiLM to grow the business further and we are excited to be part of their future.”

Simon Calver, CEO of LOVEFiLM International said, “Customers are faced with an astonishing array of choices in the entertainment world these days. LOVEFiLM International will ensure that Amazon Europe’s customers get the best possible DVD rental service. We will be delighted to welcome all Amazon Europe customers to the LOVEFiLM service. This new, bigger customer base will give us an even better position from which to build LOVEFiLM as the best place for customers to find film.”

Amazon Europe will continue to operate the DVD rental business on behalf of LOVEFiLM for a period of time following the close of the transaction to ensure an efficient transition and smooth customer experience. No staff reductions are planned at Amazon’s German or UK operations as a result of the business transfer.

Download the Full LOVEFiLM-Amazon-press-release

I will bring you more news on this story throughout the coming months.

Read more on LOVEFiLM taking over Amazon DVD rental