DALLAS — The world's leading video rental chain has taken a big step toward making a trip to the corner video store unnecessary.
Blockbuster Inc. and Enron Broadband Services have struck a 20-year agreement to deliver movies on demand to consumers' computers or televisions over high-speed telephone lines.
The two Texas companies were expected to offer the movies in selected cities by year's end. Those cities have not been determined.
Consumers will be able to choose for the first time from an extensive library of movies through their computer or television screens with VHS quality — and VCR-like control, the companies said Wednesday.
"We said a year ago that we would transition Blockbuster from a retail powerhouse to a multichannel powerhouse in the delivery of home entertainment," said John Antioco, chairman and CEO of Dallas-based Blockbuster. "This is the deal that will make it happen."
Consumers will need a set-top box that can be bought or rented and a high-speed Internet connection, such as a digital subscriber line (DSL).
The companies are working out details on what to charge customers and how Blockbuster, Enron and the DSL providers will share revenue, Antioco said. Consumers may be offered a pay-per-view option as well as a monthly charge for a set number of movies.
DirecTV, one of the biggest pay-per-view movie providers, now offers about 55 current hits. Blockbuster and Enron, which has a global fiber-optic network, expect to have about 500 movies available in each city they will serve.
The deal should help Blockbuster, which boasts of being within a 10-minute drive of 70 percent of the U.S. population, from losing market share at its 7,200 stores from video-on-demand competitors.
Blockbuster expects to extend the service to other domestic and international markets next year.
Last fall, America Online Inc. said it would invest $30 million in Blockbuster to develop the video store's Internet site.