is currently offering a library of around 15,000 titles and is charging £13.99 a month for its subscription service. This allows users to have three DVDs out at any one time.
Blockbuster plans to promote the subscription service with a free one-month trial. Its £13.99 service compares with Video Island, at £12.99 with two rentals, and ScreenSelect, at £14.99 with three rentals.
The announcement of Blockbuster's UK launch into the online market follows that of US market leader Netflix, which earlier this week revealed plans for its own UK launch later this year.
There has already been some consolidation in the market, with UK service merging with rival In-Movies in January to create the biggest online DVD library in the UK. It currently boasts 16,000 titles.
However, Blockbuster has the advantage of a large marketing campaign to support its launch and plans television advertising later this month.
Blockbuster said that the success of DVD, with 57% of British homes now owning a DVD player, is changing Saturday nights. The company said that Saturday night television attracted the smallest audience of the week but that its stores were busier that night than any other.
Steve Foulser, commercial vice-president of Blockbuster, said: "Many of our customers rent on impulse and our stores are the perfect solution for this. However, the online service will suit those with very busy lifestyles who want a more up-to-date choice of movie than is available on the premium channels. It will be like having a multiplex in your front room."
Blockbuster is owned by Viacom. Globally, it has 8,900 stores, across the Americas, Europe, Asia and Australia. There are 5m members in the UK.
If you have an opinion on this or any other issue raised on Brand Republic, join the debate in the .