Stelios Haji-Ioannou's easyGroup is entering the onlineDVD rental market with an easyCinema DVD service powered by rental platformVideo Island.

Due to be launched in January, the service will operate apay-as-you-go model, charging easyCinema customers £1.99 per DVD rental andoffering a 21-day return policy.

easyGroup joins existing Video Island partners, such asnational brands Tesco, MSN and ITV.

Haji-Ioannou launched easyCinema first exhibition venturein Milton Keynes last year. Hecommented: "easyCinema offers a great service at unbeatable value and we aim todemolish consumer exploitation by high street rental stores."

Meanwhile, online DVD rental operator LoveFilm has reportedly teamed up with High street retailer WHSmith to launch WHSmith Movies Direct - and a supermarket announcement is imminent.

WHS customers pay a monthly fee, starting at £9.99 amonth and in return can choose from 22,000 titles and rent them for anunlimited period. The service can be found on WHSmith's website.

LoveFilm also provides the white label service forChannel Four and Film Four.

Last week, research outfit Hitwise published figuresshowing Blockbuster as the leader in the online DVD rental market with a 36.6%share of all online visits to a UK-based movie rental site.

The figures show its closest competitor (which recently merged with Video Island) with around 24%,followed by (19.8%) and MovieChoices (6.7%).