When Blockbuster CEO Jim Keyes shared with analysts last week his long-term strategy to transition the video rental giant into a multi-faceted entertainment brand, he said many of the most visible changes to retail stores would be seen in the first quarter of next year.

Changes include updating stores to make them more tech-focused with "downloading stations" and lounge areas. He also said the company would roll out kiosks at airports and shopping malls.

It appears the retailer is wasting little time. A "Blockbuster Express" shingle has apparently been hung on a commercial building in Columbus, Ohio that was being leased by a startup kiosk company, called E-Play LLC.

A Columbus-based reporter emailed to say that he spotted a Blockbuster-branded kiosk offering $1 rentals inside the former e-Play headquarters.

Video Business covered e-Play last October, when its CEO Alan Rudy said the startup was testing DVD sell-through kiosks in fast food restaurants Wendy’s and White Castle and mass merchant Meijer’s. He said they would eventually use kiosks to sell film downloads to personal media devices and downloads to be burned onto DVD.

In February, e-Play received a $200,000 business development grant from the state's economic development department to build and deploy download to burn kiosks at gas stations, shopping malls and restaurants.

The e-Play website is still up, but the listed phone numbers aren't working. A call to Rudy at his other company, a business incubator called "Into Great Companies" hasn't been returned.

Blockbuster spokesman Randy Hargrove said that Blockbuster hasn't acquired E-Play. He told the reporter in Columbus that the company was aligning itself with someone but declined to name them.

He also appeared to confirm in a separate email that Blockbuster is indeed deploying an unspecified number of kiosks.

"Blockbuster is exploring new and additional ways to provide consumers with convenient access to media entertainment, and that includes exploring the distribution of DVDs through vending machines," Hargrove said in an email to Video Business Tuesday. "We have not acquired e-Play and have not disclosed the number of Blockbuster branded vending machines, locations or other details. Blockbuster is transitioning from being a place for DVD rental to being a brand that enables customers to get their media entertainment however they want."

Blockbuster earlier this summer purchased Movielink for $7 million, which owns the digital rights to 6,000 movie titles.

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MVD is giving away free downloads of documentary D.I.Y. OR DIE: How to Survive as an Independent Artist at Microsoft's Zune Marketplace. The doc will be available in eight episodes over eight weeks in the podcast section.

Seven DVD extras will be available, one per week after the final chapter of the film is posted.

Directed by Michael Dean, the film features interviews and performances by Lydia Lunch, Ian MacKaye (Fugazi), J Mascis (Dinosaur jr.), Jim Rose (Jim Rose Sideshow), J.G. Thirlwell (Foetus), Mike Watt (Minutemen), Richard Kern (Filmmaker), Ron Asheton (Stooges), Madigan Shive (Bonfire Madigan), Dave Brockie (Gwar), Craig Newmark (founder Craig's List) and more.

According to MVD, Dean was asked why he wanted to put his film online for free and here's his reply: "It's my gift to the world. People write me every day and tell me the film got them off their ass. I made the film to spread a message, not make money. And somehow, it still made money. That's how I do things - it's how I pay my rent to the Universe."

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The online movie service, MovieFlix.com announced today thats website membership has reached 2.5 million subscribers.

The company, which offers a free basic subsription model and premium model to more popular titles for $7.95, says the significant increase in membership is attributed to the rising prevalence of both broadband and wireless Internet connections and the site's expanded film selection of over 4,000 titles.

"We're extremely pleased to see our membership numbers growing so rapidly. MovieFlix provides a unique combination of high speed streaming video and rare, classic and hard to find movies. This niche market has proven to be larger than expected and our members tend to be real movie buffs who are extremely loyal," says MovieFlix cofounder and CEO Opher Mizrahi.

MovieFlix.com, founded in 1998, is a privately held company based in Hollywood. Its library contains movies, short films, independent films and television shows in over thirty popular categories -- many of which are offered to members for unlimited free viewing.

It has 4,000 movie titles, of which 250 are adult titles, said its spokesman Robert Moskovits.

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Lifetime has followed larger networks in making a bigger presence on the Web, including scripted and reality series that are exclusive to the Web on MyLifetime.com.

The site launched Monday but was down for maintenance Tuesday morning.

According to VB sister publication TWICE, MyLifetime.com will stream episodes from Lifetime shows, including Blood Ties and Lisa Williams: Life Among the Dead. The shows also were streamed on Lifetime's former Web site, LifetimeTV.com.

The new site also will offer seven Web series by the end of the year and at least 16 next year.

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Another product to make sense of the heaps of rich video content streamed online, the video indexing service, Clipblast, has launched a new service that allows users to index and search for streaming videos on the web.

That includes watching television shows online.

With the advent of Hulu, the partnership of NBC-U and Fox to put their television shows online, as well as countless peer to peer sharing of commercially produced content -- the idea of watching television seems rather trite. .. but for live sports.

ClipBlast, which formed three years ago, was primarily a search engine for saved video clips. This latest incarnation searches live streaming video, which allows users to search among thousands of web streams that are embeded on web sites.

From CNN news clips, to the latest episode of Heroes, ClipBlast scans 100 insitutional content providers as well as user generated video. 

In the three days since its launch, the service has gotten strong play on Apple's Mac platform, becoming one of the most downloaded "widgets" among Mac users to store on their toolbar, a ClipBlast representative said.

"As more and more TV news organizations worldwide are making their streams available online, we're delighted to be able to provide virtually instant access to those who want to search, browse and watch live broadcasts – accurately and reliably,” said Gary Baker, ClipBlast! founder and CEO.  "Whether it’s the recent wildfires in Southern California, upheaval in Pakistan or any other breaking news, we’re fulfilling our mission as the go-to source for all video on the web… not just clips.”

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Add one more customer to sign onto Sonic Solutions' wildly popular  Qflix encryption service.

Online movie service, CinemaNow has licensed Sonic's anti-piracy encryption service, which provides the same Content Scramble System as commercially mass-produced DVDs and can play in any set-top DVD player.

Until recently, CinemaNow had been using its own proprietary encryption, but this latest move signals the company's need to expand its title offerings.

With the agreement, CinemaNow's video library will be available within Sonic's movie download computer software application, Roxio Venue, that users can use to manage their video files and burn movies with Qflix-enabled DVD burners.

Whether studios allow companies like CinemaNow to pedal their movies to customers who legally burn them onto recordable DVDs remains to be seen. What is clear however, is that Sonic Solutions has the technology that everybody wants.

Sonic has been rolling out licensing deals for Qflix to companies not only in the download retail space, but those involved in commercial fulfillment, like TitleMatch Entertainment Group, kiosk operators, like Polar Frog Digital, and computer makers like Dell Computer.

"This initiative for us started three years ago," said company spokesman Chris Taylor. "As of a year ago, when the DVD-CCA first defined specifications for recording with CSS, our technology was in the works -- our technology was going through testing by that body to ensure the highest level of compatibility possible with that format. Final approval hadn't been given, but we were going through the process with them."

By the time the final vote took place just weeks ago, the technology was ready, he said.

"Essentially, a whole bunch of people were waiting at that starting gate," he said.

In addition to CinemaNow, Sonic has licensed Qflix deals to other download providers, Akimbo and Blockbuster-owned Movielink, which will share space with CinemaNow in Sonic's Roxio Venue software bundled with new computers.

The final details are yet to be decided, but essentially users will have a single interface to choose from among an array of titles by various providers. Space could get tight among providers trying to differentiate themselves.

But for Sonic, more is merrier.

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It's getting toward the holiday season, there's no denying it. It's the time when a lot of us will be seeing more of our friends and relatives. You'll catch up on what you've been doing with your lives. Several years ago, I remember a cousin telling me he'd signed up with Netflix, and what a great way it was to rent movies. But in more recent years, I hear more about downloading, and not the legal kind. A friend said if they don't want people downloading, they shouldn't make it so easy to do it. I've had a cousin tell me he thinks my days writing about DVDs will come to an end soon because the numbers of people he sees downloading from illegal sites are so high. I've had a relative apologize to me for buying a $5 copy of a DVD of The Simpsons Movie that someone downloaded from the Internet. I've told them all that I'd appreciate it if they did things the legal way. When someone close to you tells you something like this, what will you say?

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Among heavily trafficked web portals and countless blogs, traditional television programming is about to become much more ubiquitous over the Internet.

The online video service Hulu, a partnership between Fox and NBC, launched this week with a beta program from its own website, and it began rolling out the service to its web partners Yahoo, MSN, AOL, Myspace, and Comcast's Fancast.com, which can use it however they please.

The Hulu player is viral and can be embedded anywhere on the Internet -- blogs, websites or Myspace pages. You can show short clips or full length programs -- with ease. I watched the hour-long first episode of The Office season 4 last night. The quality is far superior to the granular pixels of Google's YouTube.

The only glitch I found was a pleasant surprise: Hulu hasn't yet inserted the promised commercials that are supposed to support the venture, so the show ran without interruption.

I see this becoming the hub for traditional programming. It's streamed, on-demand with content from over 15 cable networks, like Bravo, E! Entertainment, FX, Sci Fi, USA, and independent, web-centric content providers.

Last week, the company signed deals with Sony Pictures Television and MGM, to snag 1,000 hours of programming.

And a Hulu spokesperson dropped hints that fee-based new release movies could follow.

I'm close to chucking my Tivo and monthly service charge out the window, because I only use it for catching missed shows. The full line up of shows is available on Hulu.com, but here a list of some my favorite offered:

24, 30 Rock, American Dad, Andy Barker P.I., Arrested Development, Bionic Woman, The Blues Brothers, The Breakfast Club, Buffy the Vampire Slayer, Conan the Barbarian, Family Guy, Friday Night Lights, Heroes, Hill Street Blues, House, The Jerk, K-Ville, King of the Hill, Kojak, Master and Commander: The Far Side of the World, October Sky, The Office, Saturday Night Live, Scrubs, Sideways, Simon & Simon, The Simpsons and WKRP in Cincinnati

Content providers include: Bravo, CNET, Comedy Time, E! Entertainment Television, Ford Models, Fox Atomic, Fox Reality, FX Networks, FUEL TV, G4, Golf Channel, IGN, Movieola, National Geographic, Oxygen, SPEED, Sundance Channel, Sci Fi Network, The Fight Network, The Style Network, X17 Online, USA Network, Versus and more.

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What would set-up box actually mean for users, and for Netflix?

For one thing, it wouldn't address the main hurdle for digital downloads: which is not technology, but  intellectual property.

If Netflix were to roll out a set-top box tomorrow, Netflix subscribers would not be allowed unlimted access to Netflix's touted 85,000 titles, but rather the limited offerings available on the company's Instant Watching feature, which streams movies onto a Windows-based PC.

To access the big library, users would have to pay for them or rent them – much the same way you order pay per view through cable.

Those are terms dealt out by the major movie studios. They don't allow their products to be digitally distributed to a subscriber-based service.

It’s not technology, it’s intellectual property.

After their theatrical release, movies typically go first to home video for three to four weeks before they begin their  pay-per-view window. Studios require a transaction per viewing – either a 24-hour rental or ownership.

A Netflix set top box that offers digital downloads of movies onto a TV would fall into this category.

After pay per view, movies enter their "first run pay TV" window. That’s where HBO, Showtime and Starz already have the big titles locked into long term contracts.

(After that they go into an ad-supported broadcast window for the networks and then back again for a second-run pay TV window in a multi-year cycle.)

Starz deals with Disney and Sony, HBO has Dream Works, Fox, Warner Brothers and Unviersal, and Showtime has Paramount and MGM.

Pursuit of Happiness, the Will Smith movie, is about to enter its broadcast window, which Starz has exclusive rights to until April 2009.

“These are long-term deals. Every movie is contractually locked into a 9 to 10 year deal window scheme,”  says Bob Greene, executive vice president with Starz.

Starz knew it was going to get Spiderman 3 well before the movie came out, simply because they already had the full production slate for Columbia Pictures, which is owned by Sony.

He added, “Netflix did a wonderful job -- when they finally announced Watch Now – they culled together some movies from the major studios.”

The rest are non-theatrical titles, older movies, or foreign films, he said.

“They got Pan’s Labyrinth,” he said. “But they can't offer Spiderman 3.”

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Netflix has filed paperwork to include set-top TV boxes under the Netflix logo, once again fueling (reserved) speculation that it's finally ready to roll out a television-ready receiver.

The filing, just discovered today by Trademork.com, actually happened in late August, which was shortly after the company reportedly tested several models on a super-secret focus group.

And back in the summer of 2006, the company laid out a long-term vision that included a set-top box to download movies.

It's no shocker that the company would finally get around to taking care of its legal paperwork.

It was rumored that Netflix would unveil two boxes, one with component and HDMI connections for $100, and a composite S-video model for $50.

The language in the filing covers "receipt, download, playing, viewing, and rental of audio and video programming through the use of internet connections".

Netflix has given no indication of when such a box might make it to market.

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How annoyed are TV viewers with commercials? Enough to send them to the Internet.

A new survey shows that online audiences of TV programs have doubled in the last year, with 16 percent of all Internet users now watching TV episodes online.

It's easy to find television episodes online. You can buy them for about $1.99 each from places like iTunes, Amazon.com, and Bittorrent.com, or go straight to network websites, like NBC.com and ABC.com, and watch streamed episodes that have a fraction of the advertising breaks than on television.

That's not to mention the throngs of illegitimate torrent-based websites out there.

Those who are watching TV online, myself included, generally cite personal convenience as their main reason for doing so. That ranked 75 percent of the respondents who returned their survey forms. More than a third of the respondents said they watched online to avoid commercials.

The quarterly report by The Conference Board and TNS is based on a survey of 10,000 households.

"Although online television viewing is still not a widespread phenomenon, the proportion of users has increased since 2006 and is likely to increase over time, given consumers' love for entertainment," said Lynn Franco, Director of the non-profit Conference Board Consumer Research Center.

The top methods for viewing broadcasts online are streaming and free downloading. Some people enrolled in pay per download and subscription services, though they are much less prevelent, the survey found.

About two-thirds of viewers stream online content, and more than 40 percent download content for free.

The survey revealed that 42 percent of online users say they watch TV online to catch up on a missed episode, which was up from 30 percent a year ago.

Watching entire TV episodes has replaced the news as the most widely viewed content online.

"Over the next few years, the growing popularity of viewing TV episodes and shows online is going to have a huge impact on the way brands and advertisers communicate with viewers," says Shari Morwood, E.V.P. of Technology, Telecommunications and Media at TNS. "If advertisers can effectively leverage the online video platform, we should see much more interactivity and emotional connection between brands and the online TV viewing audience. On a broader scale, we will also see changes in viewing preferences, including TV on mobile devices, as media, telecom, and technology increasingly converge."

The not-for-profit, Conference Board is a business membership organization, producing for example, the Consumer Confidence Index and the Leading Economic Indicators for the U.S. and other major nations. TNS provides custom research and analysis in consumer electronics.

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Netflix sees great potential in its relatively new feature that allows subscribers to watch a movie title instantly on their Windows-based computer.

Since rolling out the service in January, the company had recorded 10 million viewings of movies by Aug. 22, with viewers increasing exponentially over the summer.

In some cases, viewers of Instant On outnumbered traditional subscribers during the early weeks of a title's release, said Chief Content Officer Ted Sarandos.

However, Netflix has not said how it plans to use Instant On in the future.

It can only legally distribute about 4,000 of its 85,000 DVD titles through on demand. Users cannot save movies onto their hard drives nor does the service does not work for Macintosh.

Ten million viewings, while impressive, is a proverbial drop in the bucket compared to the 1.6 million DVDs Netflix mails out each weekday.

Instant viewing works by "billing" Netflix subscribers per hour, awarding one hour of viewing for every dollar a customer pays in monthly fees. A monthly subscriber, who pays $16.99 a month for 3 DVDs at a time, is also awarded 17 hours of free online content.

While enthusiastic about the feature, Sarandos said it is "way too early" to make any blanket predictions on what that means to the company and industry.

"Online video itself is kind of in its infancy," Sarandos said.

The feature is a step in the brave new world of instant gratification and electronic distribution that Netflix has always intended on tapping.

"Right now we're kind in the very early minutes in the second act of a 3-act play," company spokesman Steve Swasey said back in September when it announced ten million viewers. "The very early part of the hybrid act: which is DVD and watching online, whatever form that takes. ... By the 3rd Act it will be all online. DVDs will be obsolete, like VHS is today."

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