amazon-instant-video-logoLaunching what it calls the UK’s “most complete digital video service” Amazon is upping the ante in its rivalry with Netflix. The online retailer will fold its LoveFilm streaming service into its British website as of February 26 and combine it with Amazon Prime which offers perks like premium delivery services and Kindle ebook borrowing. The combination will effectively make Amazon the UK’s largest digital TV and film streaming provider. LoveFilm, which Amazon acquired in 2011 for about £200M ($334M), will rebrand as Prime Instant Video. It has a catalog of over 15,000 movies and TV episodes and is the main rival to Netflix which launched in the UK in January 2012. Among its TV offerings are The Walking Dead and Vikings which are available the day after their U.S. broadcast. Amazon has pledged to increase its investment Lovefilm_logoin original programming and Prime will offer new series and pilots from Amazon Studios. A la iTunes, the new service will also give users the option of digital downloads and rentals of some 50,000 titles including new releases. The service will come with a £79 ($131.55) annual subscription fee. Amazon says that’s a 35% savings compared to paying for LoveFilm and Amazon Prime separately. Customers who join this week ahead of the launch are being given a discounted rate of £49 ($81.55). Netflix goes for just under £72 a year. “Millions of customers in the U.S. have streaming video included as part of their Prime membership and they tell us they love the combination of unlimited delivery, the ability to borrow Kindle books, and convenient access to thousands of the most popular movies, TV shows and exclusive videos,” says Amazon Prime VP Greg Greeley. “We are delighted to be bringing that same combination of services to the UK.” The market is one of the most advanced in Europe in terms of VOD offerings while Netflix is looking to move into other territories including France and Germany, many expect by the end of the year.