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Lovefilm and Video Island Inc, the owner of screenselect.co.uk, are to merge.
Video Island's chief executive Simon Calver said the move won't affect customers in the short term. “There will be no change, it's business as usual,” he said. However, he added, the two companies will start trading as one brand, Lovefilm, within six months.
Currently the two companies control 70 per cent of the online rental market – and around 17 per cent of the total DVD rental market. The deal, a 50-50 merger, will give the combined group more than 400,000 subscribers.
The group will offer customers the largest DVD library in Europe, with more than 70,000 unique titles and 1.2 million DVDs and video games. The new company will ship more than two million rental DVDs every month.
Both companies currently work with major partners including AOL, CD Wow, Channel 4, Dixons Store Group, easyGroup, Guardian Newspapers, ITV, MSN, News International, Odeon, Sainsbury, Tesco and Vue Cinemas, some of whom offer a white-labelled service.
The deal is subject to shareholder approval.
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