Next Generation Access promises to fully democratise the web, so everyone benefits from fast connections and high speeds — and not just large corporations with dedicated lines and large IT budgets. Lovefilm chief executive Simon Calver is in no doubt as to how the next wave of internet capability in the UK will enable growth and innovation at his company.
Set up only seven years ago, Lovefilm is already Britain’s biggest specialist DVD rental-by-post company, mailing out four million rentals a month across five countries to 1.25 million subscribers, including more than 1 million in the UK. However, Calver believes that the industry will change beyond recognition in the next five to ten years as much faster infrastructure allows its customers to rapidly download films from the internet and watch them on personal computers and television. “It will be very much driven by what consumers want to do for their own convenience,” he says.
“We started Lovefilm basing our business on physical delivery of films but, over the last few years, we have introduced digital-on-demand services where people can stream films to their PCs. “What’s going to happen in the next five to ten years will take this much further.” Calver believes there are a number of technological barriers to overcome, not least providing an easier way for films to be downloaded so they can be watched on television, rather than a PC — something he is confident will soon be developed. But he feels the ease of use of such download services will be so much greater once Next Generation Access is available that customers will increasingly access home entertainment online. Lovefilm is getting ready to benefit. It currently has 2,500 titles available for digital streaming, compared with the 65,000 films it holds on DVD. However, it is planning to increase its digital catalogue to between 7,000 and 10,000 by the end of next year.
As faster IT infrastructure allows this new medium to grow, Calver believes Lovefilm’s current market penetration of four per cent of UK households can rise above 10pc.That will mean Lovefilm, with 450 staff in London, Peterborough, Germany and Norway, taking on media giants Sky and Virgin but, having already competed against Blockbuster and other DVD rental chains, the company is ready for the challenge. “We’ll just change from competing with one 800lb gorilla to different ones,” says Calver, adding that much faster internet will spawn dozens of new competitors and then a period of consolidation and mergers. “Whenever change takes place in the media sector, the first movers are in the small and medium enterprise sector because that’s where technology and innovation takes place.” As well as enabling consumer focused businesses in the creative and media sector to better connect with customers and make their services and products more user friendly, Next Generation Access also promises to transform the way that such firms operate. “Remote working will be possible for companies like ours,” says Calver. “We already use call centres in India for answering emails because they help provide a 24-hour, seven-day-a week service. However, Next Generation Access is going to give us more choice and greater options.” He also believes it will make video-conferencing much more viable and useful, and will also enable greater online collaboration with business partners. But he says the main benefit for media companies will be the ease and speed with which they can communicate with their customers.
“Our strategy has been to give the new digital product to existing customers for free to provide them with added value,” he adds. “But over the next five to ten years, we’re going to be transferring our brand from a physical model to an internet one.”
Working at home will be easier
Bill Murphy, managing director of BT Business, can see Next Generation Access improving many aspects of the media and creative industries, from streamlining approval processes and therefore saving both time and money, to delivering richer content and more branded experiences online. “A lot of people in creative industries already work from home,” says Murphy. “Next Generation Access will make their communications faster and more effective too. “For the first time, people’s communication experience will feel as seamless and fast as an everyday computing task. It will change what is possible beyond even the wildest imagining of a few years ago. Media is a very dynamic industry in which small and medium-sized enterprises have a long track record in innovation and technology. “The new networks will support the launch of new business applications, ways of marketing and communicating that will cut business costs and allow firms to better compete in the UK and with overseas competition.”