Blockbuster remembers it bought Movielink for a reason

While company after company enter the digital movie download realm including former outsiders like Apple and Microsoft, the company once synonymous with movie rentals has been noticeably absent: Blockbuster. This was especially surprising since it bought movie download site Movielink nearly a year ago presumably to enter the fray. Now it finally is.

Blockbuster has rolled out a very limited test of its Movielink implementation, according to The Dallas Morning News. 500 select users now have links to digitally download movies on the Blockbuster website.

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500 is a laughably small test, but that number will keep expanding each week throughout the summer until a launch of what The Dallas Morning News is calling Blockbuster.com Movielink. You’d think Blockbuster could come up with a better name than that.

One element that does sound very intriguing is the supposed rental price: $2. It also seems that you will be able to download movies to own on the site for relatively cheap: $8 and up.

No word on how this will effect Blockbuster’s laughably bad initial digital distribution effort: In-store movie kiosks. After dropping its ill-conceived attempt to buy retailer Circuit City, perhaps Blockbuster is really starting to wake up.

The question is: Is it too late? Blockbuster now has competition ranging from the aforementioned Microsoft (which recently announced it was partnering with Netflix to bring its movies to the Xbox 360 gaming console) to Sony (which is launching its own digital movie download service for its PS3 device) to Apple (which has the Apple TV and iTunes movie store). There is also Amazon, Vudu and Roku (which also has a deal with Netflix, but is looking to expand with other services as well).

Blockbuster has not yet said how it plans to get movies downloaded into your living room and on your television, which all of the other services are now working on.

Blockbuster paid $20 million for Movielink, which was a considerable deal considering its investors had poured $100 million into the company.