Our take...
By partnering Hybrid Television Services Blockbuster has immediately overcome one of the primary obstacles for online movie adoption – delivering content directly to the television set rather than restricting viewing to the PC. Usage rates during the pilot scheme were high, indicating consumer interest in the ability to watch movies on demand on the primary screen.

However, the initial library is small and would need expanding to provide viewers with a similar level of choice to that available through other digital outlets. A catalogue of 100 titles compares unfavourably with Telstra's BigPond Movies (with several thousand movies) and the Australian iTunes store (which had 700 titles at launch in August 2008). Pricing on Blockbuster Movies on Demand is on a par with iTunes which charges AU$5.99 for a new release and AU$ 3.99 for older titles.

With most of the major Australian ISPs imposing data caps on customers, downloading several movie files (which are typically 1-2MB in size) could result in a consumer exceeding their monthly allowance, leading to additional charges. Internode may be hoping that the provision of unmetered access to Blockbuster movies will help to attract new subscribers to its broadband packages. This strategy has already been adopted by broadband providers Telstra and iiNet, exempting downloads from BigPond Movies and iTunes from their data caps respectively.