What this means for the consumers is they will not only be able to rent videos from Blockbuster's 129 stores island-wide but also download or purchase movies over the Internet or cable television, thanks to webs-tv's content delivery technologies and the diverse range of contents held by Blockbuster.

In fact, Morse Chen, CEO of webs-tv, said beginning this summer, users will be able to download hundreds of movies over the Internet through Blockbuster Taiwan's Web site, among them box-office hits such as "After This Our Exile" and "Curse of the Golden Flower."

"We will become Taiwan's largest movie procurement company, spending NT$600 million annually to purchase movie content," Chen said. "The purchase of Blockbuster Taiwan gives us better leverage in negotiating with movie studios on copyrights, and we'll increase the choice of movies for downloads once we get copyright issues out of the way."

The purchase of Blockbuster Taiwan marked yet another effort by webs-tv to expand its operations and outreach. Founded in 1999, the company in September acquired Taiwan's top Internet content portal Yam, which added to a range of services already offered by webs-tv including fast-speed connection and multimedia content provision. Webs-tv currently has membership of 18.5 million.

With the deal, Blockbuster Taiwan will become Lots Home Entertainment Ltd., a subsidiary under webs-tv that will continue to operate video rental stores under the Blockbuster brand, which has all but become a household name throughout the world.

In Chen's words, the video rental business has evolved over the years with the changing nature of content storage media. As storage devices evolved from VHS tapes to DVDs, Blockbuster has also changed from large-space video rental outlets to small shops bolstered by added-value services.

And that is not the end of it, Chen said, as broadband technologies and high-speed Internet access will allow delivery of contents directly to the home, saving the need of consumers to walk to their neighborhood video shops to get movies. And this is what the synergy between webs-tv and Blockbuster is all about, he said.

The offering of movie downloads this summer serves as one example of the blend between the physical and virtual in the new movie rental business, Chen said. The movies may be downloaded, streamed or delivered physically -- in DVDs -- to users' homes after ordering them online. Prices of movie downloads "will not be significantly different" from those for movie rentals, Chen said, adding users may either purchase a downloaded movie or watch it for a duration of three days, all for different prices. Downloaded movies will be encrypted to protect against copyright infringements, he said.

In the future, webs-TV will partner up with set-top box and cable operators to make distribution channel even more diverse. By then, users will have the liberty of choosing movie contents on a Blockbuster channel on their digital TV, enjoying the full benefits of video-on-demand, Chen said.

Despite all that, Blockbuster stores will continue to exist to meet the needs of customers, Chen said.

"We are trying to widen our distribution channels, not to kill a particular one," he said. "People will always need interaction with other people. That's what video stores are for."