Barnes & Noble, the biggest traditional US bookseller, will launch a video service that lets users buy and watch movies and TV shows on their mobile devices and televisions.
The New York-based company says users of its new Nook Video service will be able to purchase from an extensive collection of movies and shows from major studios including HBO, Sony Pictures, Viacom and Warner Brothers.
The move into video puts Barnes & Noble more directly into competition with other online video providers, including Amazon.com and Apple Inc.
Users will be able to download videos and view them on Barnes & Noble's Nook tablets and other devices with its soon to be launched Nook Video app.
Prices for movies and shows will be competitive with other leading services, a representative of Barnes & Noble Inc said.
Barnes & Noble is facing tough competition from online retailers such as Amazon.com, which sells the Kindle tablets and e-readers, as consumers increasingly move away from traditional books in favour of electronic books, and from DVDs to streaming video.
The trend has prompted the company to invest heavily in its Nook e-reader and e-books.
Last month the company said its Nook unit - which includes e-readers, digital content and accessories - had flat revenue at $192 million in its fiscal first quarter.
Sales of digital content, which includes digital books, digital newsstand and the apps business, surged 46 per cent.
Barnes & Noble has 689 stores in the US.
The company's stock fell 3.7 per cent to close at $12.26 on Tuesday, after rising to $13.61 in morning trading.