Supermarket giant Tesco moved into yet another new market today with a deal for majority control of online movie-streaming service Blinkbox.
The UK's biggest supermarket will take on the likes of iTunes and Amazon with its 80% share in Blinkbox, which offers around 9,000 movies to stream over the internet and has around two million visitors a month.
The move into the online-movie market comes shortly after Tesco unveiled plans to sell secondhand cars and joins banking services, furniture and clothing as goods offered beyond its traditional grocery fare.
Tesco revealed a 12.3% rise in underlying profits to £3.8 billion in the year to February 26 yesterday, but new chief executive Philip Clarke promised to deliver "a faster rate of product innovation" in the UK.
Tesco revealed a 0.7% drop in same-store sales, excluding VAT and fuel, in its fourth-quarter as Mr Clarke admitted the company failed to keep up with its rivals in areas such as clothing and electricals.
Blinkbox, launched in 2008, allows users to buy or rent movies and adds new films and television shows every month. It also offers free, advert-supported content.
The movies can be viewed on PC, Mac, PlayStation3 consoles and internet-enabled televisions.
Tesco bought its stake from investment firms Eden Ventures and Nordic Venture Partners for an undisclosed sum.
Richard Brasher, Tesco UK chief executive, said: "Whether customers want to own the DVD, download a digital movie, stream a rental or all three, Tesco is committed to giving customers choice."
Blinkbox was founded by Michael Comish and Adrian Letts, who still run the company today.
Mr Comish, Blinkbox chief executive, said the deal would bring the service to a greater customer base.
"It's a hugely exciting time, looking at how accessible entertainment is becoming for consumers."
Tesco's UK general merchandise sales dropped 3.3% in the second half as it underperformed in clothing and electricals.
The group's strongest growth came from Asia, where trading profits rose 30% to £570 million, or 17.5% up on a constant currency basis.