Movie Gallery -- the media cats behind Hollywood Video and Game Crazy stores -- just announced a foray into the online video rental service. Set to launch sometime in mid-to-late 2007, the new service is meant to complement its brick-and-mortar business. They also announced an extension to their movie kiosk program by adding another 200 movie vending machines to the 74 units already occupying high traffic areas in malls and supermarkets. How the new rental service (no mention of download-to-own) will integrate (if at all) with their recently acquired MovieBeam service is unclear. One thing's for sure however, Blockbuster had better get a move on if they hope to compete in this redefined marketplace which is both busting at the seams while simultaneously converging.

[Via eHomeUpgrade]

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Movie Gallery to enter on-line video rental service