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The new rules of movie rentals

Where you rent is increasingly about what technology you use.

By Karen Datko Aug 16, 2010 11:44AM

This Deal of the Day comes from Kelli B. Grant at partner site SmartMoney.

 

Choosing where to rent movies may soon depend in part on what gadgets you own (basic DVD player excluded).

 

Over the last year, electronics manufacturers, content providers and rental companies have made a number of partnerships that give consumers more viewing options. TVs, Blu-ray players, game consoles and cell phones, among other devices, today have the ability to download and play movies, or stream them online.

 

"The choices are almost dizzying now," says Andrew Eisner, director of content for electronics review site Retrevo.com.

The selection is expanding rapidly, too.

 

Last week, Netflix announced a deal with movie channel EPIX -- a joint venture of Viacom's Paramount Pictures, Lions Gate Entertainment and Metro-Goldwyn-Meyer -- to make the studios' movies available for streaming three months after they're available on the pay-cable channel.

 

Blockbuster and Comcast together are testing a new mailed rental service called DVDsByMail.com. Blockbuster already has a subscription service, with prices starting at $8.99 a month. But consumers who sign up separately for the new venture with Comcast are eligible for awards discounts of $1 to $3 per month -- essentially rewarding people for having the right cable box. (One wrinkle: With second-quarter losses widening and more than $1 billion in debt, Blockbuster may soon file for bankruptcy protection or be acquired by another company, leaving uncertain the future of such a program, as well as Blockbuster's other endeavors.)

 

Consumer interest in new ways to view films tripled from 2008 to 2009, according to a spring report from market researcher Ipsos MediaCT. Twenty percent of surveyed consumers said they had streamed a movie in the past 30 days, and 13% reported a download.

Although the audience for downloaded or streamed movies is still relatively small compared with that of movies on disc, companies are boosting offerings to prepare for more intelligent devices, says Michael Pachter, a research analyst for equity research firm Wedbush. "There's going to be a day, and it's not very far away -- maybe five years -- when every TV sold will have a built-in Wi-Fi chip," he says.

Should Internet connectivity be a consideration when purchasing new gadgets? Maybe. Devices that offer it tend to be slightly more expensive, but the investment could pay off as streaming picks up, Eisner says. Just make sure the content partners match your rental subscriptions or streaming tastes -- costs for multiple options can add up fast.

 

Here's what's available, and whether it's a good buy:

 

Digital video players. Digital video players, which instantly stream videos from sites like Netflix, are some of the best deals around, says Pachter. Models including Roku and Apple TV work with existing home theater systems and computers and are plug-and-play. Roku starts at $70 and can stream Netflix and Amazon On Demand, as well as other content. Apple TV starts at $229.

 

TV. Plenty of people already have a big, high-definition television, so manufacturers are using features like 3D and Internet connectivity to drive sales. Best Buy, for example, has 69 TVs that connect with a variety of services, including 46 with Netflix, 23 with streaming service VUDU, 20 with online rental and streaming service CinemaNow and 18 with Blockbuster.

 

A connected TV is great if you're in the market for a new set anyway, but there are cheaper routes. There are other reasons to wait, too. Google and Apple are both developing TV app "operating systems," which may be worth waiting for, Eisner says.

 

Blu-ray. A chief benefit of Blu-ray's BD-Live standard is online content, such as the latest trailers and talks with movie directors, says David Berman, a spokesman for the Home Theater Specialists of America, an industry group. The latest players are all connectible, and many have partnered with Netflix, Blockbuster and other content providers. Samsung and LG are offering purchasers of select models a $15 credit to CinemaNow.

 

Gaming systems. Consoles can be a good choice even for non-gamers. The PlayStation 3 "is a flawless Blu-ray player," Pachter says. Its $300 price tag is on par with some of the better Blu-ray players, and offers high-definition streaming through Netflix, as well as on its own store. The player is also rumored to have a partnership with movie and TV show streaming service Hulu in the works, he says. The Xbox and Wii also offer Netflix content.

 

Cell phone. Watching on a 3.5-inch screen has limited appeal, but content is available, says Ross Rubin, executive director of industry analysis for NPD Group. The iPhone offers rented and streamed content from the Apple Store, as well as apps for Netflix and Hulu. The Samsung Epic 4G on Sprint, available later this month, will have a media hub service to buy or rent TV shows and movies.

 

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