Blockbuster Inc on Tuesday announced an agreement that allows consumers to instantly view movies and video from its OnDemand service on Samsung's televisions and electronics devices.

The deal expands the reach of the company, best known for its brick-and morter-movie rental stores, further into the market for digital distribution of video.

The service, due to launch in September or October in the United States, is similar to Blockbuster's existing pacts with TV maker Vizio and digital video recorder maker TiVo Inc, which was announced in March.

Rival video distribution players Netflix and Amazon.com also provide video to TiVo users' TVs.

Under the pact with South Korea's Samsung Electronics Co Ltd, the world's top maker of memory chips and flat screen TVs, Blockbuster's OnDemand service will be integrated into new Samsung HD TVs, Home Theater Systems and Blu-ray players.

Financial terms of the deal were not disclosed, nor would Blockbuster give any indication of expected revenues from the agreement.

Kevin Lewis, senior video president of digital entertainment at Blockbuster, said the deal has the potential to put some of the newest video titles -- available for around $2 to $4 each -- on millions of Samsung devices.

We believe that just as we are the leading offline rental company, we should be the leading online rental company, Lewis said in an interview.

While Blockbuster is planting its brand in more and more video downloading locations, it still faces tough competition from cable and satellite TV operators, which also offer robust lineups of movies and shows via set-top boxes already in place in millions of homes.

In addition, many others enjoy watching films downloaded from Apple Inc's iTunes or from Napster-like file-sharing sites such as The Pirate Bay.

Consumers who already own certain 2009 Samsung Blu-ray players, home theater systems, LCD and Plasma HDTVs can access the service though a software upgrade. Samsung's agreement with Blockbuster also calls for some Samsung devices, such as Blu-ray players, to be sold in Blockbuster stores.

(Reporting by Franklin Paul, editing by Leslie Gevirtz)

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