Mumbai: US movie rental chain Blockbuster Inc has bought film download service Movielink for an undisclosed sum, to extend its sway in the business of film distribution.

The acquisition marks Blockbuster's latest effort to expand beyond the store-based movie-rental market.

Blockbuster has been in talks to buy Santa Monica, California-based Movielink since March, and the cash-and-stock deal was then expected to cost under $50 million.

The market for legal movie downloads is small, but Hollywood and the movie rental industry are backing the sector in a bid to avoid wide-scale unauthorized downloading of copyrighted content.

Blockbuster, sources said, pans to operate Movielink independently and eventually make elements of the service, with more than 3,300 titles available to download through blockbuster.com. Blockbuster also has a stake in CinemaNow.

But that may not help since, in a field already crowded with Netflix, iTunes, Amazon and more, Blockbuster is the only one with high operating costs - namely rent on its rental stores.

Also, rival Netflix has 4,000-title movie-streaming service launched this year. Movielink competes also with a handful of competitors such as Vongo and CinemaNow offering a fraction of the 70,000 titles available on DVD.

Movielink, launched in 2002 by major studios, including Metro-Goldwyn-Mayer Studios, Viacom Inc.'s Paramount Pictures, Sony Corp.'s Sony Pictures Entertainment, Time Warner Inc.'s Warner Bros., and Universal Studios, operated by General Electric Co unit NBC Universal, was struggling from the beginning.

Revenue from downloaded videos grew from $11 million in 2005 to $111 million last year against $25 billion in DVD and video consumption in 2006, according to market research data.

Movielink's downloads tended to cost roughly the same as a regular DVD, which can be played anywhere whereas Movielink downloads are DRM encumbered and trapped on the PC.

The acquisition provides Blockbuster with a way to send movies straight into televisions and computers, complementing its store and movie-by-mail operations, where it competes with Netflix.