In its second-largest acquisition, Amazon buys the company for $970 million.
The e-retailer will make the U.K. the global hub of its film and TV offerings.
Amazon.com Inc. has selected London as the home for its global creative center for its film and television offerings. The online shopping behemoth says that it decided to base its digital media operations in England’s capital city because of the large pool of technical staff available there.
“London is a hotbed of tech talent, and testament to that fact is Amazon choosing the capital as the location for the new global Digital Media Development Centre,” says Paula Byrne, managing director of the facility in London. “Innovation is part of the Amazon DNA and we are creating a British center of excellence to design and develop the next generation of TV and film services for a wide range of digital devices.”
The facility will cover eight floors and 47,000 square feet when completed. It will house teams of software development engineers, user-interface experts and graphic designers who will focus on creating interactive digital services for TVs, game consoles, smartphones and PCs, developing digital media for Amazon web sites around the world, and building services and software that power digital media.
The building will accommodate the former employees of Pushbutton and LoveFilm, which now are both Amazon companies. Staff at these companies developed such products as LoveFilm Instant, which offers members unlimited streaming of movies for a fixed monthly fee of about $7.76 on PCs, PlayStations, iPads and many other devices.
LoveFilm—which is seen as a European rival of U.S. online entertainment service Netflix Inc.—was established in the United Kingdom in 2002 under a different name, and went through numerous mergers and acquisitions before Amazon bought it in early 2011.
LoveFilm now has more than 2 million subscribers in the United Kingdom, Germany, Sweden, Denmark and Norway. However, it now has new competition from Netflix Inc., which recently began operating in Europe.
Pushbutton was also started in the United Kingdom in 2002, by Byrne and others. Pushbutton creates user interfaces, or the interactive screens that users see when they launch a service such as LoveFilm. All the screens and buttons that a LoveFilm customer sees and interacts with are likely to have been designed by Pushbutton—whether they are on a PlayStation, PC or any of around 280 devices that work with the program. Amazon acquired Pushbutton in 2011.
Amazon’s decision to consolidate its film and television operations in one location in London comes only months after Netflix, the leading provider of movies and TV shows via the web, entered the United Kingdom.
"We are starting 2012 in the best possible way: by giving consumers in the U.K. and Ireland an amazing entertainment experience," Netflix CEO Reed Hastings said in a statement announcing the company’s entry into Europe in January. "Now, you can enjoy as many great films and TV programs as you want, when you want, where you want, for one low monthly price with no contracts or commitments."
Meanwhile, Amazon’s new hub has been enthusiastically welcomed by London Mayor Boris Johnson. “I am thrilled to welcome Amazon’s fantastic new international digital centre to London,” Johnson says. “For this wildly successful and dynamic company to choose our city to site such an important facility is a splendid feather in our cap. We know we have the talent, the space and infrastructure to make the most of the digital economy—this will be my prime message during Games-time, as I seek to woo even more companies for the capital, delivering jobs and growth for Londoners. Amazon’s investment propels us well up the league table of global tech cities and we thank them for their vote of confidence.”
London will play host to the Olympic Games, which begin Friday.