Consumer electronics retailer Best Buy Inc. (NYSE: BBY) is starting to find out that many consumers don't necessarily want to own movies on DVD any longer. In fact, DVD sales have been floundering and the replacement format, Blu-ray, still has a long way to go in order to catch up with the standard DVD format.

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.

Seagate Technology (NYSE: STX) has had an interesting seven years. The company was taken private by a group of investment firms led by Silver Lake Partners and Texas Pacific Group and then returned to the public markets a mere two years later for some odd reason. Wait: that reason was to give a payoff to the investors, as going off the market for 24 months gave the global company a chance to sneer at Wall Street's quarterly, paranoid expectations and focus on long-term strategy. The hard drive company you may have rarely heard of, though, is recording billions in revenue each quarter and is in fine shape financially. CEO Bill Watkins trumpets this fact all the time, but the Street rarely listens.

So, with Watkins alluding to $3 billion quarters in the near future and growing profits these days, is the market listening? Maybe not yet, but maybe your portfolio should. The never-slowing demand for storage is everywhere these days, hiding in plain site. Have a full-size iPod, Tivo box or other DVR, Xbox 360 or a computer in the home? Each one of those probably has some kind of hard drive in size, and according to Watkins, more consumers are buying all that storage than businesses these days. We have an insatiable need to store movies, music, files, taxes and everything else digitally, so this makes sense.

As I noted yesterday, rumors dropped recently that Best Buy Co., Inc. (NYSE: BBY) will soon begin offering digital movie downloads from Lion's Gate studios (and most likely, other studios too) in its push to jumpstart the competition in the emerging market for digital content delivery. Yes, Apple Inc. (NASDAQ: AAPL)'s iTunes music store has had this market cornered for quite some time, starting with music downloads and continuing with movie and television show downloads. But, those pieces have been limited to the PC and iPod ecosystem (until the Apple TV came along this year, at least).

Consumers want their content to work across products, manufacturers and standards, which has been the reason why some movie download services have not gotten off to a start at all. When all the technical and content protection limitations are known by customers, they generally react like they should: "I'm just not interested." Best Buy's recent role expansion of an entertainment VP to oversee its U.S. entertainment business, however, shows that the retailer may in fact get its foot deeper into the emerging digital content field (music, movies, possibly more). That is, if it can give the market what it wants: unfettered and easy access to content across devices and platforms.

It's pretty apparent by now that entertainment content is moving towards all-digital delivery. It's cheaper, more immediate and has tremendous cost advantages. At the same time content owners continue to be scared to death that all these advantages could be stamped out by rabid content copying and unauthorized transmission over the Internet (without any payments changing hands). Will Best Buy be the one that makes digital content like music and movies easy to download, use and re-use on a variety of devices? It's recent focus on customer relationship development would point to "yes" as an answer to this question, although Apple has made the first bold move here. Who's next? If it's Best Buy, it will be hard to stop the distribution of digital content soon.

Will the music and movie companies ever listen to the marketplace and change their business models to accommodate the digital age? There are many pundits -- me included -- who think companies like EMI, Bertlesmann and Sony Music, along with Sony Pictures, Paramount, and Fox, will continue to see declining revenues in music and movie streams due to digital downloads of that same content.

While the music industry has already been severely impacted by this, the movie industry is just now starting to see the fallout. It's true that downloading a song is pretty effortless, but getting a movie from the internet to your PC and then to wherever you'll be watching it can be challenging (except for the technical folks among us). But that's just it -- will the movie industry suffer as with the music industry did? Is it possible movie watchers want that rich experience of a theater instead of that laptop (or any other mediocre quality) screen?

Big media companies -- as strong and powerful as they may be -- still can't stop the consumer's thirst for wanting the content they have to be used on any device, any time, anywhere. All this copy protection mumbo-jumbo is only killing consumer interest in the distribution models of big studios -- forcing many customers to illicit channels for their media. Some business models need to be pulled into the here-and-now, kicking and screaming I suppose.

Amazon.com Inc. (Nasdaq:AMZN) and Tivo Inc. (Nasdaq:TIVO) are joining forces to allow people to download tv shows and movies from the Internet to their digital video recorders.

The service will be available to the 1.5 million people with TIVO DVRs with broadband capabilities later this year. The Associated Press said the companies refused to give a target date for its launch, which immediately makes me wonder if they are having technology problems. Still, this may video downloads attractive to people who don't want to spend hours watching videos over their computer screen.

Amazon launched its Amazon Unbox download service last year Wal-Mart Stores Inc. (NYSE:WMT) just got in the game. Of course, there's still a whole host of other services such as NetFlix Inc. (Nasdaq:NFLX), Movielink and CinemaNow. Apple Inc. (Nasdaq:AAPL) also full-length movies at iTunes. Plus, there are loads of sites that offer the content illegally.

So far, companies are more eager to offer video downloads than the public is to buy them. That may change as people get used to the technology but the law of supply and demand still holds. I expect that these services will become cheaper and that small sites will get squeezed out of business.

This is great news for consumers but the impact on investors won't be known until the market develops, which won't be for a while.

The VHS tape had a pretty spectacular run -- over 20 years in the mainstream consumer electronics arena. With the advent of popular and cheap DVD players in the late 1990s, VHS started losing its appeal for most consumers. With $150 DVD recorders now in the mainstream, there is very little reason to own a VCR these days. But with the advent of digital files that just fly from Internet servers to iPods and other devices, are DVDs destined to live a shorter life than the VHS tape?

Although recent standards like HD-DVD and Blu-Ray will only find a niche audience most likely (DVDs look so good to the rest of us, you know), it's hard to imagine that a physical medium like the DVD will go away. DVD players are everywhere, and even recent moves from companies like Apple -- and even the agreement Apple has with Wal-Mart that will let Wal-Mart shoppers buy "digital movie tickets" that can be redeemed for online movie purchases and downloads -- won't cause DVD sales to just plummet overnight.

I agree with this article that states the need for a physical medium will almost always exist. The experience a DVD provides is first rate these days (except that too much non-control is given to the customer, argh), and duplicating that on a streaming platform of download does not exist. Sure, there will be large niche audiences that want to embrace non-DVD entertainment -- but for the rest of us who share DVDs, don't have a huge movie library on demand from our cable, Internet or satellite provider or course, the DVD and the DVD rental store still fit the bill quite nicely -- and will for quite a while.

With YouTube and other movie sites, the Internet is going video-crazy. Well, Amazon.com wants a piece of the action and plans to launch a movie download service in August, according to a report in Advertising Age.

Although, this is not the short-form stuff. Rather, Amazon.com is going all-the-way: that is, you will be able to download full-length movies.

Essentially, Amazon.com wants to create an iTunes-like portal. Although, it looks like consumers will have different ways to purchase the content, such as through a subscription model or pay-per-view.

Since Amazon.com already sells huge amounts of DVDs, the company has a database of movie-loving customers. What's more, the company owns IMDB.com, which is a huge movie database, which is likely to be a powerful marketing force.

So far, full-movie downloads are in its infancy. But, with Amazon.com backing the movement, chances are this will become a big business fast.