This is refreshing honesty from a digital media boss - Lovefilm co-founder and COO William Reeve tells E-consultancy how the DVD renter/retailer’s online download service, launched in March, is going: “It’s going. The issue is that we’re not offering as good value on it as we’d like to ... Although it’s competitively priced, it’s not something I could tell my friends they should use. Buying a download of something like King Kong for £20 when you can buy the DVD for £15 – why would you do that?”

The problem, Reeve says, is his “hands are tied by the studios”, some of which price downloadable movies extra-high to protect sales of physical copies even though distribution of bits is cheaper than that of atoms: “There’s a situation where different studios have different policies, there isn’t consistency in pricing and there isn’t a range of content we would be proud of. We have some good titles – a few thousand, but our DVD service has almost 70,000 titles.”

Reeve said downloads were still only “a small percentage” of Lovefilm’s business, “not growing any faster than DVDs”, but he remains excited about ad-supported downloads, which “get round some of the value for money issues”. Lovefilm claims to be Europe’s biggest DVD/download operator, with 500,000 subscribers.

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