Blockbuster in the States has bought the internet movie provider Movielink.
This acquisition will allow Blockbuster to offer a video downloading services to customers, something it desperately needed to stay competitive.
"It immediately puts us in the digital download business. Clearly, our customers have responded favorably to having other convenient ways to access movies and entertainment", said a Blockbuster spokesperson.
Blockbuster said that Movielink will carry on operating as a standalone download service via Movielink.com but parts of the service would eventually be integrated into Blockbuster's own online offering.
When integrated, this means Blockbuster would then be able to offer movies via downloads to be sent straight to customer's televisions or computers, as well as still offering rentals from shops or through the post.
Netflix, Apple, Amazon.com and Wal-Mart Stores have all introduced movie download services in the States recently, so before this purchase Blockbuster was attracting criticism for being out of date.
Shares of Blockbuster rose following the announcement.