Tesco is set to launch an online DVD rental service this month, in a bid to copy the success of Netflix, an online DVD rental firm in the US.

Tesco has created a partnership with a new British company Video Island, which will allow customers to rent as many DVDs as they want for a monthly fee.

Netflix said online DVD rental has soared Stateside and claims 2 million customers itself, a trend it added that was likely to be repeated in Britain.

Some 40% of UK households own a DVD player with that figure expected to double by 2008.