Wal-Mart, the world's biggest retailer, on Tuesday launched a web-based video download service in the United States, using its market clout to boast the delivery of online entertainment content at cheaper prices to U.S. families.

The company said its service will offer more than 3,000 movie and TV titles from Hollywood studios and networks, making it a major competitor to rival offerings from established online services like Apple's iTunes.

The Wal-Mart online service, using Hewlett-Packard technology, will enable customers to download movies and TV shows directly to their personal computers for viewing on PCs, laptops and other media players.

With its marketing muscle, Wal-Mart's latest foray into the burgeoning digital entertainment market will threaten the dominance of Apple's iTunes online store, currently the No. 1 site for legal music and video downloads, not to mention its impact on a number of smaller competitors, industry analysts said.

Wal-Mart said its online service makes it the first major retailer to offer video downloads with the backing of all major Hollywood studios. The company earlier abandoned an effort to rent DVDs online, and the new service now focuses on selling DVDs.

Wal-Mart has already become one of the biggest DVD vendors in the United States by offering heavily discounted prices to take a market share from brick and mortar chains like Blockbuster Inc.

"With thousands of movie and TV titles now available for download, coupled with the strength of our successful physical DVD business, this is an unprecedented offering of video content, features and capabilities currently unmatched in the market," said Kevin Swint, Wal-Mart's divisional merchandise manager for digital media, in a news release.

The retailer has ramped up its push into online commerce after losing some early ground on the Internet to technology firms.

Walmart.com was the No. 4 U.S. online retailer by volume of goods sold, behind Amazon, Yahoo and Dell, during the 2006 holiday shopping season.

It is estimated that the online download business in the United States generates some 3 billion dollars in annual revenue, compared with an estimated 27 billion dollars from DVD rentals and sales.

But the prospects of online entertainment face restrictions, as downloaded digital contents, which can be repeatedly played on computers, are still not easily transferred to a larger TV screen.