New releases will be available online on the same day they are released on DVD, selling for up to $US19.88, with older films selling for up to $US9.88. The retailer giant accounts for roughly 40 per cent of all US DVD sales.

The service is only compatible with Windows XP/Vista and Internet Explorer 6 or 7, requiring users to install Wal-mart's playback software in order to watch downloaded movies. Downloads can be backed up to DVD but won't play in a DVD player. Wal-mart also offers the option to download a PlayForSure-compatible "portable format" version at no extra cost. Such restrictions mean content downloaded from Wal-mart won't play on Apple's iPod or Microsoft's new Zune media player.

Wal-mart's launch comes only weeks before BitTorrent, the company behind one of the world's most popular file-sharing technologies, launches its own legit video download service. It has signed content deals with a number of key content providers including Warner Bros, 20th Century Fox, Paramount, Nickelodeon and MTV2. Available movies will include "X-Men The Last Stand," "Saw III," "Mission: Impossible III," and "Ghost in the Shell." TV programming will include "24," "Prison Break" and "South Park".

Microsoft has also announced a range of movie download agreements to coincide with last month's Windows Vista launch, such as an Australian deal allowing users to download Telstra BigPond movies via an Xbox 360 or Vista media center PC.{moscomment}