Sony Computer Entertainment Europe and BSkyB, the company that operates subscription television service Sky Digital, have announced a deal to sell video-on-demand to PlayStation Portable owners in the UK and Ireland.

The joint venture between the two will create Europe's first official PSP video download service and will have an estimated market of two million PSP users. Under the deal, PSP owners will be able to download, either wirelessly or via a PC connection, anything ranging from entertainment, music, animation and sports content from both Sky and other channel partners.

BSkyB, partly owned by Rupert Murdoch’s News Corp., hopes to make the service available early next year. Access to content will be available either on a subscription or pay-per-view basis. Although the PSP has been lagging behind Nintendo's DS in terms of sales, this latest announcement is definitely a positive step forward for Sony’s device.