Amazon has today announced a licensing agreement with MGM which will see hundreds of classic movies and TV shows added to its Prime Instant Video catalog throughout 2012.

Amazon Instant Video is a digital video streaming and download service that lets users rent, buy or subscribe to a substantial range of videos. Prime Instant Video is Amazon’s video subscription service. At the time of writing, Prime Instant Video makes more than 18,000 movies and TV shows available to stream, which is free to those who subscribe to its 2-day shipping service Amazon Prime, charged at an annual rate.

This new deal means that throughout this year you’ll be able to watch the likes of Dances with Wolves, Rain Man, The Silence of the Lambs and Terminator, whilst perennial TV favorites such as Stargate will also be made available.

Amazon launched its Prime Instant video service last February, a service which is currently only available in the US. Viewers can watch content on the Kindle Fire, Xbox 360, PlayStation 3 and more.

Amazon is really beginning to ramp up its media offering, having inked a deal with Paramount last month. Throw into the equation its Amazon Studios division, which seeks to develop fresh content based on user submissions (such as Zombies vs. Gladiators), the Internet giant is really beginning to cement itself in the VoD space and is a genuine rival to services such as Netflix.

Earlier this year, Google also penned a deal with MGM, which saw more than 600 titles added to YouTube and Google Play.