The competition between Blockbuster and Netflix gets fiercer every month, hitting customers with new ideas and solutions on a regular basis. The best part is the two create choices, the not so good part is you’ll probably end up struggling over what to choose.

First, Netflix announced a new partnership to instant stream movies and TV episodes from Netflix directly to the TV through TiVo’s DVRs. Then, Netflix announced the availability of over 12,000 movies and TV episodes that can be instantly streamed to the TV via the Xbox 360, at no additional monthly fee for Netflix members who are also Xbox LIVE Gold members.

The response? Blockbuster announced a partnership with integrated broadband solutions provider 2Wire for an on-demand video service that offers instant access to Blockbuster Ondemand content directly through television sets.

According to the entertainment provider, the 2Wire MediaPoint digital media player is available free with the advanced rental of 25 Blockbuster Ondemand movies for $99. After the 25 rentals, the movies will be available for $1.99 each.

The player was designed to work seamlessly on any broadband connection, either wirelessly via built-in Wi-Fi or wired via Ethernet cable. Furthermore, it offers full fast-forward, rewind and pause capabilities, a DVD-quality viewing experience, HD video content support, it can be connected to HDTV and allows for movies to be played right away or saved and played later.

“The MediaPoint digital player, featuring Blockbuster Ondemand, is entertainment made easy,” said Jim Keyes, Blockbuster Chairman and CEO. “We are bringing Blockbuster, and the thousands of movies in our digital library, straight to customers’ television. The player is simple to use, delivers DVD quality video, and there is no monthly subscription commitment. We are delighted to team with 2Wire to give consumers this great entertainment product.”

Blockbuster confirmed the anticipated service in time for the holiday season, but how will it rival Netflix’ offerings?

On the one hand, we have Netflix’s free access offer to over 12,000 movie titles, for customers who subscribe to the monthly unlimited service. On the other hand, Blockbuster charges its movies at $1.99 each (after the 25 initial rental package). The difference is obvious, but Blockbuster claims access to new movie titles, while Netflix mostly offers oldies.

This will create quite a dilemma among consumers, who will have to decide whether to opt for Blockbuster’s more expensive, but more up-to-date service, or for Netflix’s cheaper and larger catalogue of titles.

Blockbuster seems very confident in terms of the choices and strategies they choose, and their biggest bet at the moment is that consumers want to see new releases, rather than Netflix’s oldies but goldies. Will that be enough to catch-up with Neflix? That still remains to be seen, but for the time being, we should really enjoy having more and more choices.