Blockbuster Goes On Demand With Digital Set-Top Box

Written by Ryan Lawler

Tuesday, November 25. 2008 at 01:10 PM EST 2 comments

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With the introduction of a new digital set-top box, video rental company Blockbuster Inc. is finally going on demand in the living room.

Blockbuster announced the availability of 2Wire Inc. 's MediaPoint Digital Media Player, which will allow subscribers to rent on-demand videos for download over the Internet.

For $99, Blockbuster customers can get the set-top box and a credit for 25 movie rentals. Downloads start at $1.99 apiece thereafter. [Ed. note: Blockbuster says, "when you rent 25 movies for $99 in advance, the DigitalPoint media player is free!" We say you're paying for the hardware and get the downloads as a bonus. To-MAY-to, to-MAH-to.]

The move pits Blockbuster against companies like Netflix Inc. (Nasdaq: NFLX), Apple Inc. (Nasdaq: AAPL), VUDU Inc. , and others that have already introduced their own Internet-connected set-top boxes.

Netflix, for instance, allows subscribers to its unlimited DVD rental by mail service to also stream videos to their PCs or selected Internet-connected devices. The streaming video service is available on $99 set-top boxes made by Roku Inc. , in addition to Microsoft Corp. (Nasdaq: MSFT)'s Xbox 360 gaming console, broadband-connected Blu-ray players from LG Electronics Inc. (London: LGLD; Korea: 6657.KS) and Samsung Corp. , and -- coming soon -- TiVo Inc. (Nasdaq: TIVO) digital video recorders.

But in many ways, the Blockbuster service is more akin to offerings available on the Apple TV digital set-top box. While Netflix streams video to its users, Blockbuster's service, like Apple's, works on a download model. Blockbuster digital video rentals are available for 24 hours after users begin watching them.

Blockbuster has the advantage over Netflix in available content, especially new releases. Netflix offers 12,000 titles through its streaming service, with some new(er) releases through a licensing deal with Starz Entertainment LLC . But Blockbuster will be able to offer its library of new releases within 30 days of their release on DVD.