Amazon's European based LOVEFiLM Instant online video service is to merge with Amazon Prime to become Prime Instant Video beginning February 26. The move echoes the way Amazon handles its business in the U.S. and anyone new to Amazon Prime in the next 5 days will lock in a special deal price of just £49 per year. After that the price rises to £79.

Existing Amazon Prime subscribers won't need to do anything until their subscription expires. For LOVEFiLM customers, the biggest change is that with the video-on-demand content you'll also now get access to the Kindle Lending Library as well as Amazon's free one-day shipping on eligible items. Existing LOVEFiLM instant subscribers will be allowed – at least for the time being – to continue with their video only package at £5.99 a month.

LOVEFiLM will continue its DVD rental service, but Amazon Prime customers will be able to purchase or rent movies too, some of which won't be available via Instant Video but will still carry the branding. Therein lies one of the main differences between this and major rival Netflix.

Amazon currently has a LOVEFiLM streaming app for iOS, which will presumably see an update in the two affected countries sometime soon to reflect the new branding. The important thing is that if you're happy as you are with LOVEFiLM, Amazon won't force you to change. But if you're not yet a Prime subscriber, there's never been a better reason to sign up. Any takers?

Source: Amazon, Amazon Instant Video