Blockbuster snaps up Movielink

Stung by increasing competition from rival Netflix, Blockbuster hopes Movielink will give its business a boost by adding download capability to its existing DVD by mail service.

Movielink was set up by a consortium of Hollywood studios in 2002 in a bid to stave off increasing losses from people downloading illegal copies of movies over the Internet. Sony Pictures Entertainment, Universal Studios, Paramount Pictures, Metro-Goldwyn-Mayer and Warner Brothers made a large number of up-to-date, popular but DRM-infected movies available for Web rental.

Adams Media Research reports that the video download market was worth around $110 million last year, still significantly less than the $25 billion generated by DVD sales.

Netflix boasts some 6.7 million US subscribers compared with Blockbuster's 3.6 million, but its catalogue is comprised mainly of older movies. Blockbuster boss Jim Keyes says he does not rule out further acquisitions in the online space. µ

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