COUCH potatoes in Ireland are to be given one more excuse not to go out. From January film buffs can select the latest movie releases and watch them a few hours later, courtesy of the internet. Screenclick.com, a Dublin-based company that rents DVDs by post, plans to launch a digital download service.

“We will be offering the latest movies for €4.50 an hour, which can be viewed on PC, laptop or portable video devices such as the Apple iPod,” says Frank O’Grady, the company’s managing director. “Our medium-term aim is video on demand. We will be going head-to-head with Sky by introducing a set-top box that will allow movie downloads to be viewed on television.”

The technology underpinning the service is provided by Lovefilm, the British company that acquired Screenclick for €3m in January. O’Grady, who owned 41% of the company he founded in 2001, was retained to head the Irish subsidiary.

Lovefilm introduced the download service in the UK in December 2005. It uses Microsoft Windows Media Player, to prevent customers copying rental movies. Customers have seven days to watch the film and it expires 24 hours after viewing has begun.

The service is still considered niche, hindered by the need to install additional hardware and software to link the computer to a television before the downloaded movie can be viewed on TV. However, the race is on to turn digital distribution mainstream, with Microsoft and Intel leading the charge to put television- compatible computers into living rooms.

“Video on demand makes sense from a distribution point of view — it slashes costs by eliminating the need for DVD packaging and postage costs,” O’Grady says. “It is also better for customers: you get what you want.”

Sky, which is 38.3% owned by News Corporation, the ultimate parent company of the Sunday Times, and offers pay-per-view movies a few months after their DVD release, is, along with NTL, expected to up the ante in this market.

It is widely acknowledged that content will be king in deciding which of the distribution channels wins out.