The most immediate threat comes from the prices of new Hollywood movies offered by digital on pay-per-view. At pounds 2.99 a time, they are highly competitive with video rental prices - which range from pounds 3 to pounds 3.50 for a new release.
FilmFour is a minnow in the digital channel business, because it will shun the Hollywood action movie in favour of the arthouse classic. But its launch draws attention to the key characteristic of digital television - it will cater for selected "communities of interest", giving people the films they want without the inconvenience of going to the video shop to hire and return the film they want, or the risk of not finding it.
The problem for the video rental business is already clear from the number of movies on Skydigital. With 11 premium channels, and a constant flow of pay-per-view movies, the service will offer more than 600 films this month, and more than 7,500 during the year.
The video shops still have the edge in offering the Hollywood blockbusters about six months after their theatrical release, while pay-per-view channels have to wait until between nine and 12 months, and premium channels 18 months. Also, small Blockbuster shops offer a choice of about 2,000 movies - still a much larger range than the television option.
The crunch will come forBlockbuster with the launch of cable digital television, and the near-certainty that tens of thousands of films will, within a few years, be available as "videos on demand", meaning that punters can browse an on-screen library, point their zapper at the television and order the immediate delivery of a film via telephone line or cable.
Piers Skinner, managing director of Blockbuster, who says "there is a lot of confusion over the whole thing" is pinning his hopes on a belief that take-up rates for digital will be slow.Reuse content