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Tesco offers online DVD rentals

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Supermarket chain Tesco is to rent DVDs via a website. The business will run along similar lines to Netflix - the US company which has picked up over 2m customers. The Tesco project is in partnership with Video Island.

Customers will have a choice of 15,000 titles. For a fixed monthly fee they can choose two, three or five DVDs. When they send back a DVD, Tesco will dispatch the next film from the wish list. Discs are returned in Freepost envelopes. Tesco refused to give prices for the service which launches at the end of the month.

Laura Weade-Gery, CEO at Tesco, said in a statement: "DVDs by post has revolutionised the way people watch film in the States and we're confident by moving into the market we can do the same in the UK."

Saul Klein, CEO at Video Island, said: "Getting anything on DVD from the High Street except for the latest releases is all but impossible. If you want anything a bit more exotic or esoteric it is really hard." Tesco's brand will help it win customers, he adds.

Tesco's website will let customers rate and review films. Seven out of ten rentals from High Street stores are of new releases, while DVD-by-post customer tend to favour older films - seven out of ten rentals are 'back catalogue' titles.

Netflix has dominated the US market despite competition from the likes of Wal-Mart. Netflix made a profit of $6.5m last year on sales of $270m. ®

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