Chief executive Frank O'Grady said Screenclick customers will be able to watch new releases on their PCs, at the same time they are issued on DVD, between �?�4 and �?�5.

O'Grady said the company hoped to have the service running "within four weeks".

Screenclick, founded by O'Grady four years ago, was acquired by its larger UK rival Lovefilm for �?�3m earlier this year. Lovefilm have signed a content deal with Universal, the studio behind recent DVD releases such as King Kong and Jarhead, to launch a movie download service in the UK.

Screenclick, which will rebrand as Lovefilm. ie, will offer a similar service in Ireland and is hoping to sign content deals with other studios soon. O'Grady said up to 800 titles would be available when the service launches.

Users will be able to watch the films for up to a week after downloading them. At that stage the files will be automatically deleted. The technology is similar to that used by Satellite broadcaster Sky which launched its own online film service in the UK and Ireland earlier this year.

Screenclick, which is projecting sales of �?�1.5m this year, will launch the videoon-demand service on its DVD rental website. The company believes the service will find a receptive audience among its 10,000 active users.

O'Grady said Screenclick would "sooner rather than later be partnering with a broadband provider" with the hope of extending the appeal of the new service.

"We're now talking to Eircom about video-ondemand, " he said. In the longer term Lovefilm/ Screenclick plans to start selling set-top boxes that will enable users to watch content downloaded to their computers on their television sets.

Lovefilm has said it will offer set-top boxes in the UK later this year. O'Grady said the boxes would not be available in Ireland for some time.

The level of broadband internet take-up in Ireland was not yet high enough to justify launching such a product, he said.