Amazon takes on Netflix with new on-demand service

Prime Instant video hopes to lock in customers for £79 a year streaming service

Amazon is taking on the likes of Netflix in the UK by extending its on-demand business offering thousands of films and TV shows online, in a bid to lock-in even more customers to its services.

More than 15,000 films and TV episodes will be made available to customers who sign up for its Prime Instant Video service.

The new creation is a combination of the current Prime service, which offers next-day delivery and a Kindle library, with streaming service LoveFilm, which Amazon owns, and will cost £79 a year.

Amazon will be hoping that the combination of services in the package will encourage customers to buy services from across its range while also attracting new customers.

Greg Greeley, vice president of Amazon Prime, said: "Millions of customers in the US have streaming video included as part of their Prime membership and they tell us they love the combination of unlimited delivery, the ability to borrow Kindle books, and convenient access to thousands of the most popular movies, TV shows and exclusive videos.

"We are delighted to be bringing that same combination of services to the UK, providing members truly unique benefits they can enjoy every day of the year."

The move will be seen as a direct rival to streaming service Netflix, which has been a critical and commercial success - notably with its Kevin Spacey remake of UK political drama House Of Cards.

Viewers will be able to rent or buy films and TV shows, including The Walking Dead and Vikings, on devices including iPads, Kindle Fire, Xbox and smart TVs.

The service, which also allows viewers to watch original Amazon shows including political comedy drama Alpha House, launches next Wednesday with the offer of a 30-day free trial.

Last month, Amazon's share price tumbled after it released its fourth-quarter results, despite posting profits of $239 million (£144.9 million).

Additional reporting agencies