Rakuten and LG launch movie offer in overcrowded European market

The pair, who have been working together for the past few years, have added LG Movies and TV to their portfolio, they announced on Wednesday. The app-based service is available on certain LG TV models in the UK, Germany, Spain and Italy, with more to follow later in the year.

In their announcement the pair made much of the fact that the app is "easily accessible through an LG TV without the need for a subscription," but users will of course have to pay for the films they want to watch. And they are already faced with an array of options to choose from when it comes to premium content consumption: the LG/Rakuten offer is just another one on the list.

Indeed, data published by digital payments company Bango a few months ago showed that in Europe customers are struggling to manage their various content subscriptions, which on average amount to 3.2 per person, most of which are streaming video on-demand (SVOD).

Similarly, media market specialist Ampere Analysis in May reported that "Internet users are becoming increasingly overwhelmed with the number of online video services they have access to." It surveyed customers in 30 global markets in the first quarter of this year and 45% of respondents agreed that they were indeed overwhelmed, up from 36% a year earlier. The increase was less marked in Western Europe and North America, it noted, but still a combined hike of 17%.

"Generally, the sentiment is felt most strongly among online respondents aged 25-44, who make up 50% of the cohort agreeing with the statement. A key factor driving the feeling among this demographic is the sheer number of SVoD services they have access to," wrote Ampere's Minal Modha. A quarter of that age bracket who agreed with the statement had five or more SVOD services in their household, as did 19% across all age ranges.

Aside from a general feeling of there being too much choice in the video streaming market, consumers also have the cost to think about. And the data varies on how much of a barrier that could prove to be.

Bango's numbers showed that 42% of European consumers surveyed had cancelled a subscription due to a recent price increase, while 60% said they could not afford all the subscriptions they would like.

But new numbers from Barb show that UK households with at least one subscription SVOD service topped the 20 million mark for the first time in the second quarter of this year, while the number of homes with two or more exceeded 14 million – that's 48% – also for the first time. It's worth noting though that use of the ad-backed tiers on Netflix and Disney+ also grew; more on that here.

There are a lot of variables here, but essentially LG and Rakuten will have their work cut out persuading customers to part with their cash, not because of the popularity of their offering, but because of the sheer number of services competing for the pounds...or euros.

Nonetheless, they are bigging up their use of webOS Pay to allow customers to shell out for content as painlessly as possible. And they are shouting about the high-profile movies they have on offer, including Furiosa: A Mad Max Saga, The Fall Guy, and Dune: Part Two. As it stands, LG Movies & TV is available on some 2022 television models, with all LG TVs from that and subsequent years due to be added before the end of the year.

"By strategically investing over KRW1 trillion (US$740 million) by 2027, we aim to significantly enhance webOS and broaden its range of offerings," said Chris Jo, senior vice president of platform business at LG Home Entertainment Company.

"LG will continue to collaborate with more than 4,000 global content partners to provide a varied and user-centric home entertainment experience for customers around the world," he said.

"We are excited to expand our strategic partnership with LG," added Sidharth Jayant, Chief Product Officer at Rakuten TV. "This collaboration underscores Rakuten TV's commitment to being at the forefront of premium entertainment, bringing the best of global cinema into the homes of our European viewers."

Clearly they believe there is a market open to them. It just happens to be a very crowded one.