HMV launches online movie rental service

X-Men First Class: among the launch titles to be offered by hmvon-demand
X-Men First Class: among the launch titles to be offered by hmvon-demand

HMV, the troubled retailer, is making a foray into online movie rentals with the launch of a branded on-demand film service, which will feature 'Harry Potter', 'X-Men' and other big-budget titles.

The hmvon-demand service, which is powered by white-label digital movie service FilmFlex, will soft launch this week, with the service promoted through its hmv.com site and to its two million reward scheme members.

The service will initially be available on the PC, but the retailer is looking to expand it to other platforms.

It has content partnerships with Sony Pictures, 20th Century Fox, Walt Disney and Warner Brothers, and claims most of its films will be available on the same day as their DVD release date.

It is planning a bigger push in January 2012, with digital and in-store advertising.

HMV, whose like-for-like sales dropped 15% for the fourth quarter of 2011, is entering a highly competitive marketplace.

It will be competing against the likes of Amazon-owned Lovefilm, Tesco's Blinkbox and Netflix, which is soon to launch in the UK.

Unlike Netflix, hmvon-demand does not offer a subscription-on-demand service, making the service more akin to YouTube's new movie rental service.

The launch of the service comes as HMV is moving to make its stores more technology focused, as the retailer struggles with falling sales in the CD and DVD market. Last week, it launched its first tech-only store.

Mark Hodgkinson, HMV's newly recruited marketing and ecommerce director, said: "With a growing number of consumers now incorporating video-on-demand into their viewing and purchasing habits, the time is right to include a digital service into our own offer."

Follow Sarah Shearman on Twitter @shearmans

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