AMAZON.COM has fired the first major salvo in the battle to sell film downloads online, announcing a string of deals with most of Hollywood’s largest studios ahead of Apple’s expected entry into the market next week.

The world’s largest online retailer launched Amazon Unbox on Thursday night, an internet service that will offer television shows, films and other videos from more than 30 studios and networks.

TV shows will cost $1.99 (£1) per episode in the US, and most movies will retail at between $7.99 to $14.99. Movies can also be rented for $3.99. It is estimated that by 2010 the market in Europe and the US will be worth about £1.5 billion.

Amazon declined to comment on whether it has plans to launch the service in the UK but analysts expect a worldwide rollout.

Apple’s response is expected on Tuesday in an event dubbed “It’s Showtime”. Wall Street believes that the company will reveal a film download service as part of its iTunes internet music store. Apple is expected to announce an initial film partnership with Disney, where Steve Jobs, the Apple chief executive, sits on the board.

The famously secretive iPod maker is expected to announce a two-tier pricing structure for films — at about $9.99 and $14.99 in the US. The move will be a concession to Hollywood executives who have resisted a flat pricing scheme such as that used on iTunes.

Amazon’s greater number of deals could give it an early advantage over Apple because having catalogues cleared by the studios for download is regarded as one of the toughest hurdles faced by would-be download services. However, analysts expect competition from several directions, including giants Microsoft and Sony.

Social networks such as MySpace.com and Bebo are also expected to play a part, together with other online recommendation sites that tap users into like-minded peers and allow word-of-mouth-style marketing campaigns.

Internet companies such as MovieLink, which released King Kong online at the same time as the DVD reached retail shelves, already sell movies in digital format online, but have failed to crack the market.

There are suggestions that studios are keen to avoid any one platform — such as iTunes — dominating the film industry in the same way as it does music, where it has an estimated 80 per cent share.

Craig Kornblau, president of Universal Studios Home Entertainment, said: “We’re going to have extensive distribution from a variety of e-tailers.”

AT A SCREEN NEAR YOU

How long does it take to download a film?

King Kong: Filesize 1.9 gigabytes on Lovefilm.com. Estimated download time: two to three hours for a home with a 2-megabit connection. But faster connections and improved compression and distribution can reduce to one hour

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