The battle for the home entertainment market just intensified in the UK, as movie rental service LoveFilm has signed up with Warner Bros, making this its first UK rights deal with a major Hollywood studio.

This announcement comes hot on the heels of the news that US rival Netflix is partnering with Miramax, MGM and Lionsgate in preparation for hitting the UK in early 2012.

The deal will cover LoveFilm’s subscription streaming service, as well as its download, pay-per-view and DVD postal renting services.

Back in July, Amazon-owned LoveFilm announced that it had signed a 5-year content deal with Entertainment One UK (eOne), giving users access to a plethora of independent movies, such as The Twilight Saga, and in September a deal with StudioCanal (Source Code, Tinker Tailor Soldier Spy) was also struck. But with Warner Bros now on board, it will now be able to offer more box-office hits, such as The Hangover and The Dark Knight.

It has also been revealed that Warner Bros has created an exclusive “second pay-TV window” for the first time ever, which effectively means BSkyB’s rights to show movies on its own services are unaffected, but LoveFilm will get exclusive titles for its streaming service. Jeffrey Schlesinger, president of Warner Bros International Television Distribution, said: “The establishment of a second pay window with LoveFilm is an important evolution in the way films are made available for viewing in the UK in ever-more convenient ways.”

BSkyB signed a deal with Warner Bros back in 2007, making its movies available on the Sky Anytime on-demand service. Earlier this year, BSkyB was ordered by the UK Competition Commission to weaken its pay-TV stranglehold on Hollywood films, noting that BSkyB’s contracts with the major Hollywood studios prevented competitors entering the same market space. The decision was provisional, however, and it doesn’t seem that this has had any bearing on the LoveFilm deal.

Earlier this year, we reported that LoveFilm was growing its London operations by a fifth, and earlier this week the service arrived on Android, albeit without streaming capability.

So the battle for the home entertainment market is really heating up now, and it will be interesting to see what other deals materialize in the weeks and months that follow. We’re sure both Netflix and LoveFilm will have a few more tricks up their sleeves.