• Ars Technica, Friday, August 10, 2007 10:45 AM

What's the movie download market like? Well, after reviewing Blockbuster's purchase of Movielink on Thursday-estimated at under $20 million by The Wall Street Journal--not so good. Why? The big movie studios backing the movie downloading startup (Warner Bros., MGM, Paramount, Universal and Sony) reportedly dumped more than $100 million into the joint venture. A cheap Movielink, on the market for well over a year, underscores the fact that consumers aren't that interested in purchasing and downloading movies.

Maybe it's the long download times. Maybe it's the ease of movie piracy. Maybe consumers have gotten used to not paying for Net material.

Blockbuster thinks it now has a three-pronged attack (store, mail and download) in its war against mail-rental king Netflix, but the acquisition of Movielink is unlikely to boost Blockbuster's fortunes for one main reason: The movie download business, far from being an add-on, actually cannibalizes on its existing in-store and mail rental services.

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