These two titans of the residential movie distribution business are clashing anon, with Blockbuster on the initiative. This traditional, Coca-Cola-vs-Pepsi-like rivalry between the two brands has now reached the realms of the Internet.

Netflix is a true believer in the streaming technology and its subscribers have been getting an unlimited dose of it at no extra charge for some time now. The company has also managed to cut a path for its services to the Xbox 360 and TiVos. But now, Blockbuster decided to make its own move in the online field of battle, and using their favorite weapon: rentals.

To further their goals of user domination, the people at Blockbuster entered a partnership with 2Wire, the tangible result of which being an Internet-connected set top box. Even if this 2Wire MediaPoint costs $99, it’s actually free, because it comes with a nicely wrapped package of 25 movies.

When users get to the bottom of this initial credit, they’ll pay as little as $1.99 (for movies not-so-hot from the oven). The usual rental deadlines apply: you can keep a movie for as much as 30 days after renting it, but it’s taken away from you 24 hours after you play it.

Blockbuster’s approach to online movie renting is actually related to the numbers and quality of the titles they have on their virtual shelves. Netflix has approximately 12,000 titles available, but, on a closer look, many of their movies are old, or somewhat obscure. In an interview with the E-Commerce Times, Blockbuster CEO and Chairman Jim Keyes, says that “we're going after quality versus quantity”, unlike “other services”.