Internet service provider (ISP) Netspace has bought online dvd rental company Webflicks.
In a statement issued today, Netspace said Webflicks would continue to operate as a wholly owned subsidiary, with all staff being retained.
Netspace noted both its own customers and those of Webflicks would be offered incentives to use Netspace' other services, through product bundling.
Webflicks allows customers to select via a Web interface a list of movie, television and music DVDs that they would like to watch. The DVDs are then delivered via post in batches when they become available.
Customers post the DVDs back when they have finished watching them.
Netspace's entrance into online dvd rental is symptomatic of a trend in the wider ISP market.
As Internet services are gradually becoming cheaper and faster, ISPs are increasingly bundling value-added services on top of basic Internet connectivity.
For example, Telstra's retail ISP division BigPond offers Internet customers discounts on its DVD and video-on-demand service BigPond Movies.
In Netspace's statement, the ISP's managing director Stuart Marburg said his company saw content initiatives such as Webflicks as providing an opportunity to drive demand for higher broadband speeds than the base 1.5Mbps offered by most ISPs.
Marburg said at that point Netspace would be poised to offer video content online.
Netspace also has ambitions to offer a full-service telephone solution, including an Internet telephony (also known as Voice over Internet Protocol or VoIP) service.
The company will launch a full telephony offering in the third quarter of this year.
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