Burning LOVE: U.K. outfit expands download model

Customers can now burn pics to DVD

Pan-European online DVD rental and movie download service LOVEFiLM will reveal the launch of a new download-to-burn service today along with a tie-up with Volkswagen to offer advertising-sponsored movie downloads.

The download-to-burn service will launch in early April with approximately 100 titles  including "Spider-Man 2" from Sony Pictures.

All titles come with Dolby AC-3 Surround Sound and special features will be added as and when they are made available by the studios. The security system is provided via Flux-DVD and the discs are protected using SecureBurn technology, which prevents unauthorized copying of the DVD. Prices start at £9.99 ($12.30) per film.

Download time is approximately 30-90 minutes, with the burning process taking as long as the playtime of the movie — meaning consumers can go from download to completed DVD in as little as two hours.

LOVEFiLM, which operates in the U.K., Scandinavia and Germany, bowed a download-to-own service this past April but has been negotiating ever since to introduce a download-to-own option for its customers. It said its research shows that 57% of its 500,000 customers want the ability to burn their movie download purchases to DVD.

"Download to burn is the next step in the evolution of movie purchasing and viewing," LOVEFiLM International CEO Simon Calver said. "Whereas consumers may have been reluctant to watch films directly on their PC, they now have the choice to burn a huge library of films to DVD and watch them on their preferred medium of choice, and all without having to leave their living room."

The company also has teamed with Volkswagen to pioneer what it claims is the world's first advertising-sponsored movie download service.

LOVEFiLM.com members can download films for free from a collection of specially selected titles, which would normally cost £2.99 ($5.78), in return for watching a short advertisement from the sponsor at the start of the film.

Volkswagen will sponsor the first collection of films, and its branding will appear across the LOVEFiLM site.

Users will download the films for free using the LOVE-FiLM.com "download manager," which allows for short Volkswagen advertisements to be streamed directly to the user's desktop while the film is downloading.

There also will be TV-quality advertisements streamed for the customer to watch before the movie commences.

The collection of films made available through the program will include "The Proposition," starring Guy Pearce and Ray Winstone; "Little Fish," with Cate Blanchett, Sam Neill and Hugo Weaving; and "The Machinist," starring Christian Bale.

The deal was brokered through Unanimis Consulting and Tribal DBB on behalf of Volkswagen.

Separately, LOVEFiLM, which now offers more than 2,500 titles for download from the likes of Warner Bros., Sony Pictures, Universal Pictures, Momentum, Icon, Tartan and Fremantle, has confirmed it is considering a stock flotation. It has appointed Goldman Sachs to advise on all options for the business, including a possible sale, but advisers suggested that a flotation could still be a year away.

According to newspaper re-ports, broadcaster ITV and cable company Virgin Media are seen as potential trade buyers. Private equity house Apax and DLJ Merchant Banking Partners, the investment arm of Credit Suisse, also are thought to have eyed the company.