Blockbuster acquired movie-download service Movielink as it seeks to better position itself for distributing movies through the Internet. Blockbuster said it will continue to operate the Movielink service and eventually make elements of the service available through Blockbuster Online.

The theory is that Movielink acquisition will give Blockbuster access to a large library of downloadable movies and a large array of television content since the service was a joint venture of major movie studios Metro-Goldwyn-Mayer, Paramount Pictures, Sony Pictures, Universal Pictures and Warner Bros. It will also allow Blockbuster to offer downloads via PCs, portable devices, home networks connected to TVs and certain set-top boxes.

This is an important tactic because Blockbuster is competing against Netflix and against cable operators offering video-on-demand (VOD). And others are also trying to enter into this space.

The purchase price was rumored to be less than $20 million.