Date: 2011 September 21 16:55
Posted by Joe
Popular UK on-line DVD retailer Play.com have been bought by Japanese group Rakuten. Play.com is the UK's biggest seller of DVDs online with estimated annual sales of about £500m. It has 14 million registered users and a staff of 500.
It was sold to Rakuten for £25m. Play.com have been successful due to a tax loop-hole that allows purchases under £18 to be VAT free when shipped from the Channel Islands to the UK mainland thanks to EU rules drafted almost 30 years ago. In November 2011, the government will reduce the amount for VAT free purchases to £15 and intend close this loop-hole totally by March 2012. The sales tax issues along with declining DVD sales is why Play.com was sold for £25m and not considerably more. The Guardian article states that DVD UK sales dipped 6% last year, while downloading and streaming rose 18%.
Play.com is popular with the UK anime fans and is often the first port of call along with Amazon.co.uk when buying DVDs and Blu-rays.
Rakuten are keen to increase their global presence, which is why they've purchases Play.com along with the French site PriceMinister and German site Tradoria.de.