Although Blockbuster's Online Total Access program, which allows customers to rent movies online and return them through the mail and in-stores, has been adding subscribers at a fast pace, Netflix had one-upped the film rental chain earlier this year by offering the ability to instantly download movies and TV shows to a computer. To that end, Blockbuster has acquired digital movie-download service Movielink, bolstering its online presence and gaining a stronger foothold to compete with rival Netflix.

Blockbuster initially plans to operate Movielink as a stand-alone service but eventually will make parts of the service available through

"Many of our stores still say 'Blockbuster Video,'" Blockbuster's chief executive, James W. Keyes said in an interview. "We're taking a fresh look at the future of Blockbuster. The popularity of (online rentals) convinced us that customers are ready for more convenient forms of digital delivery that we think Blockbuster can successfully enter."
Even though Movielink, with 3,000+ titles, carries the web's largest digital movie archive, it has struggled to gain traction in the nascent market in part because its DRMed downloads cost roughly the same as a regular DVD, which can be played anywhere whereas Movielink downloads must be played from a PC. Perhaps Blockbuster can raise the consumer awareness that Movielink needs.

Also worth noting, an increasing number of companies including and Apple are also hoping to tempt consumers to download films rather than to rent or buy them on DVD.