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Arts Alliance Media builds LOVEFiLM by acquiring Swedish DVD rental company, Boxman

Deal makes AAM the first player to expand into Europe

Arts Alliance Media (AAM), the pioneer provider of digital cinema and film delivery services, has taken a controlling stake in Swedish on-line DVD rental company, Boxman. AAM is already the majority shareholder in LOVEFiLM, the UK market leader in the online DVD rental space. Its controlling stake in Boxman makes it the first player in the market to expand its reach internationally.

LOVEFiLM is the clear leader in the UK market and was the first company to pass the 100,000 subscriber mark. It offers the widest range of titles in the UK, with over 34,000 to choose from. Boxman is a good fit as the second largest online rental DVD rental company in Sweden, with over 14,000 subscribers. Boxman was established in Sweden in 2003 with the ambition of creating a leading on demand entertainment service, with the initial focus on delivering On Line DVD rentals to customers across Scandinavia.

AAM chose Boxman because of its strong management team and fast growth strategy. It plans to use Boxman as a base for further Scandinavian expansion.

"The deal with Boxman is a logical step in our plans to expand our reach outside the UK," said Howard Kiedaisch, chief financial officer, Arts Alliance Media. "With this deal, we will become the largest on-line rental service available, with a firm international footprint in Europe. The joint power of Boxman and LOVEFiLM will be not only the largest, but also the most effective player in the market, providing a reliable, good quality service to the consumer."

"We looked across Europe to find the right company to partner with, and found the perfect solution in Boxman. The team has clearly demonstrated impressive ability in this market, achieving a great deal in a short space of time," said Mark Livingstone, chief executive officer of LOVEFiLM. "We're really excited about working with such a thriving, film-focused company."

Following the deal, Boxman will retain its own brand and employees, as well as its key partners, including TV 4, Phillips, Aftonbladet and Tradera.

"We're looking forward to working with LOVEFiLM," said Jonas Svensson, CEO of , Boxman. "We were very careful in choosing who we work with and LOVEFiLM was not only the largest established player, but also the most dynamic and solid in terms of management and operational capability."