The retailer revealed its plans to the Competition Commission, which is currently investigating rival VoD service Kangaroo, in development by ITV, BBC Worldwide and Channel 4.
Tesco's service, which will be launched through Tesco Digital.com, will offer films, TV series, and individual episodes. The retailer is currently trialling a limited range of US content from Warner Bros and Sony Pictures, with films priced from £6.82 and a single episode of a TV series costing £1.83.
However, Tesco will be up against UK broadcasters ITV, Channel 4, Five, Sky and Virgin Media in securing the rights for content to download. VoD rights may be sold separately from linear broadcast rights
by US studios, but the Competition Commission's invest-igation found that 'non-UK content is an imperfect substitute for UK content, and other wholesalers are unable to offer sufficient UK content to compete [with Kangaroo]'.
Hulu, a video website owned by News Corp and NBC Universal, is planning to launch into the UK, although it has had its entry delayed. It is currently attempting to secure UK content from third-party UK producers.