The Shawshank Redemption is one of the movies customers will be able to stream for free using Tesco’s Clubcard TV service.

Clubcard TV launches to customers today (6 March) following a month long in-house trial with staff. It will offer Clubcard’s 16 million members movie and TV programme streams free of charge with no need for a contract or subscription.

To enable the service to be offered without charge, Tesco is using Clubcard data on shopping and consumption habits as well as demographic and location data to offer customers relevant ads around streamed films and shows.

The targeting is similar to the way the supermarket uses its loyalty data to target customers with personalised Clubcard vouchers and coupons.

Scott Deutrom, managing director of Clubcard TV, who joined from Tesco-owned Blinkbox earlier this month, says: “We’re launching Clubcard TV today so that we can reward our customers with hundreds of movies and TV shows for free.

“We have launched the service with Clubcard because it means we can know our customers better than anyone … By using Clubcard, we can look at what customers buy from us, what things they like, and then make an effort to target adverts that are more relevant to them. Better still, we can target adverts based on what our customers bought yesterday, we can show that we are listening to our customers in ‘real’ time.”

The online video streaming market is becoming increasingly competitive with services such as Netflix, LoveFilm, Blinkbox, Dixon’s Knowhow Movies and Sainsbury’s Entertainment all vying for a share of the market and advertising revenues alongside broadcasters’ on-demand services like YouView, iPlayer and 4OD.

Tesco is targeting families with hundreds of films and TV shows including comedy, drama, kids TV, romance, thrillers and documentaries. Deals with Warner Bros., Endemol and Aardman are already in place with content including The Assassination of Jesse James by the Coward Robert Ford, The Shawshank Redemption, The Care Bears and The Only Way is Essex.

Clubcard TV will not offer new releases but is powered by Tesco’s Blinkbox service, which offers a subscription-free pay as you go model with the latest releases.

To access the online service customers enter their 16-digit Clubcard number and name and address details. The supermarket plans to extend the online service to games consoles, tablets, Smart TVs, Blu-ray players and set top boxes.