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Blockbuster Announces Streaming Movie Service

The home video rental giant is developing a new service that will offer customers the ability to stream films directly to their TV sets. The service is expected to be available this month.

“We’re talking to numerous companies and vendors about products, services, alliances and initiatives that can help us achieve our mission to transform Blockbuster into a company that provides access to media content across multiple channels — from our stores, by mail, through kiosks, through downloading, through portable content-enabled devices — so it’s not surprising that there are rumors out there,” a Blockbuster representative said.

The streaming device would join a growing roster of devices that aim to bring broadband video to the living room, including Apple TV, which hasn’t quite seen sales match the hype surrounding the product.

LG Electronics said earlier this month that it has joined Netflix to compete in the market with a similar device.

Blockbuster has been trying to reinvent its brand as a digital delivery service for movies as an alternative to its store.

The new Blockbuster device is believed to be a stand-alone product akin to Apple TV in contrast to embedding a Blockbuster-branded service in such existing devices as Microsoft’s Xbox 360 or TiVo. While the movie streaming business could give Blockbuster a distinctive positioning in the crowded marketplace, that won’t come without significant investment in marketing and manufacturing.

The movie rental company knows all too well the importance of online film rentals. When Apple said in January that iTunes would adopt a rental model, it sent Blockbuster’s stock plummeting to 17%.

Blockbuster said the new service will be available sometime this month.