Amazon.com is developing a film streaming service, which would compete directly with Netflix Inc, the Financial Times said.
Amazon is planning to bundle access to the streaming service with Amazon Prime, a scheme that guarantees Amazon customers unlimited free shipping of books and other items sold by the online retailer after paying an initial fee, the FT said, citing a person familiar with Amazon's plans.
Amazon's has just agreed to buy the 58 percent of British DVD and games rental firm Lovefilm that it does not already own for an undisclosed price.
Amazon did not immediately respond to Reuters calls seeking comment.
(Reporting by Sakthi Prasad in Bangalore. Editing by Jane Merriman)