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Tesco's Blinkbox Threatens to Unseat Netflix, Amazon in the UK

Posted by Sheila Shayon on August 20, 2013 05:10 PM

Tesco, the UK's biggest retailer has moved far beyond its grocery roots. The company has upped its already substantial investment in BlinkBox, a digital download service that streams thousands of movies and TV series to computers, tblets, TVs and Sony's PlayStation 3. Now, its rumored that e-books and music are on the horizon. 

Tesco joins the ranks of fellow streaming service operators including Netflix, Amazon, and Lovefilm, all of which contribute to an industry that is projected to hit $20 billion by 2018, with a 17 percent yearly growth. However, if Tesco finds a way to marry together all of its businesses, it could potentially have a leg-up on major competitors like Netlix. 

“If you can watch a film and get money off your groceries, petrol or extra Clubcard points, then Blinkbox may begin to look more appealing” than Netflix, Amazon, Lovefilm, and even Apple iTunes, Michael Perry, an analyst at Verdict Research told Bloomberg. “Blinkbox definitely poses a threat.”

While Netflix and Lovefilm charge UK streaming subscribers $9.36 a month for unlimited content, Blinkbox’s 1 million customers pay per movie or TV show, attracting less commited customers. Blinkbox also has a unique licensing strategy for newer titles that has made the service more attractive in the competitive market. “We are able to offer the latest movies when they come out on DVD—over a year ahead of Netflix and Lovefilm,” said Michael Cornish, Blinkbox’s co-founder and CEO who sold his company to Tesco in 2011 for an undisclosed sum.

But what really sets Blinkbox apart is its built-in customer base of loyal Tesco shoppers, much like Amazon's Prime service, who will gradually become more digitally savvy. The service has drawn curious consumers in via trial campaigns like its "Try TV On Us," which featured samples of popular shows such as The Newsroom, Sons Of Anarchy, Modern Family and I'm Alan Partridge.

"Great TV continues to be one of our biggest obsessions and the fuel for many conversations,” Cornish told Metro UK. “There’s more choice than ever before thanks to services like ours, and our insights told us that customers relished the opportunity to try TV before committing to purchase.” Tesco also trialed a "Big Night" promotion in the confection aisles of its Watford and Croydon stores that offered a Blinkbox rental with a screen showing trailers and a chance to garner extra Clubcard loyalty points.

And if being involved in the streaming game wasn't competitive enough, Tesco recently announced that it will be releasing its own tablet come the holiday season. The device, which will be priced around £100 and pre-loaded with Blinkbox will again directly challenge big players like Apple and Amazon, which offer consumers easier access to their personal brand of content through their own mobile devices. 

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