Blockbuster starts offering internet movie downloads. So what?

Blockbuster, Inc. (NYSE: BBI) used to be king of the DVD rental hill. Then came Netflix, Inc. (NASDAQ: NFLX) and the DVD rental-by-mail explosion began. While Blockbuster seemed content renting DVDs in its stores, Netflix was building a nationwide network to get DVD rentals by mail in customers' hands within a day or two while offering very competitive rental flat-price plans.

Netflix has even become a pioneer recently in getting its content database into the hands of consumers without using a physical media like DVD. Similar to other electronics companies like Apple, Inc. (NASDAQ: AAPL) and the AppleTV device, Netflix is partnering with companies to ensure it can reach those who are embracing digital-only delivery of all those movies and TV shows. Blockbuster now seems to be playing catch-up again, as it is offering digital movie downloads through a whole slew of partner devices. It will offer rentals through PCs, cell phones, digital movie player devices and Blu-ray disc players (among other things).

Does Blockbuster think offering over 10,000 movies over so many devices so fast will enable it to instantly compete with Netflix and all the other digital movie download services? Doubtful. These efforts to go from nothing to something overnight rarely work well, but competition in the digital content business is always good. Still, Netflix has the upper hand here and is not going to relinquish its position any time soon. Nice try, Blockbuster. Let's see how this works before lauding it.