Blockbuster takes on Netflix with new set-top box

LOS ANGELES, USA: Blockbuster Inc said on Monday that it would roll out a new digital media player that brings fewer, but more recent titles from the Internet to consumers' televisions than a six-month old offering from rival Netflix Inc.

The MediaPoint player by broadband device maker 2Wire allows Blockbuster customers to download high-definition quality movies to their TVs via broadband lines for $1.99 apiece, after an initial $99 for the box and 25 films.

Consumers have 30 days to watch a film once it is downloaded to the set-top box, and must finish watching it within 24 hours of pushing the "play" button.

The service, called Blockbuster OnDemand, can be ordered at http://www.blockbuster.com beginning on Tuesday.

Unlike Netflix's "Watch Instantly" feature, which streams movies to subscribers' TVs or personal computers, the Blockbuster on-demand service will be open to customers who do not subscribe to its DVD-by-mail service, Blockbuster Online.

Blockbuster Chairman and Chief Executive Jim Keyes said the company's longtime emphasis on new releases draws different consumers from Netflix subscribers, who are directed by its Web site to older catalog titles.

"Even though this is a very small market, the movies and the devices are the differentiators," Keyes said in an interview, noting that the entire video on demand market is currently about $1.5 billion.

The service is essentially a rebranding and expansion of Blockbuster's Movielink.com Web site, which offers about 10,000 on-demand movies for download to personal computers.

About 2,000 of those titles, such as recent DVD releases "Forgetting Sarah Marshall", "Sisterhood of the Traveling Pants 2" and "Get Smart", can be downloaded to TVs via Blockbuster OnDemand, the company said.

After December 15, Movielink.com customers will be redirected to Blockbuster.com, according to a posting on Movielink.com.

Blockbuster also is pursuing deals to package the new service with Blu-Ray DVD players and is considering alliances with video game console makers, but is not ready to disclose the details, Keyes said.

Blockbuster has been playing catch-up to Netflix since it launched its online movie rental service in 2005, and has incurred huge costs to try to win part of the $2.2 billion online rental market.

In May, Netflix launched the $99 Roku set-top box, and followed that with partnerships with companies like TiVo Inc, Samsung, LG Electronics and Microsoft Corp to enable video from its "Watch Instantly" service be streamed to television.

The "Watch Instantly" Web streaming service has a library of more than 12,000 movies and TV episodes, mainly older titles, and is offered free to its more than 8 million subscribers.