Other than the lack of HD content, Hulu is a pretty slick service -- in fact it is a glimpse of our content dream, whatever you want, whenever you want. But according to NBC Universal's TV chief, Marc Graboff, Hulu is still looking for ways "to turn those digital pennies into digital dollars." Although the technology for digital delivery has been around for some time, actually making money on it has been another story. Hulu is determined to make it work though and is trying all kinds of things "like adding inventory (more advertising) or creating a subscription model with different windows" -- now when he says Windows, he doesn't mean the things we look out of, he means limited availability of shows. We'd argue that release windows are currently the worst part of all the digital delivery services today, but as much as we hope Hulu figures it out, based on our own polls, most aren't willing to pay a subscription for Hulu's current offerings.

We knew good and well it was coming, and now the deed has been done. As promised, Blockbuster's On Demand movie rental service has gone live on a bevy of TiVo boxes, enabling Series2, Series3, TiVo HD and TiVo HD XL DVRs to watch all sorts of releases without needing to purchase another set-top-box or tap into their cable company's VOD system. We're told that most rentals will range from $2.99 (for the classics) to $3.99 (for new releases), with the film catalog expected to expand over the coming weeks. HD aficionados will have to wait a tick before seeing any movies available in high-def, but those looking to pick up a new TiVo can now saunter into any Blockbuster retail location in order to claim one. Eager to get in on the action? Fire up your box and hit the "Video On Demand" screen from TiVo Central.

A new report from In-Stat indicates what we already suspected; because of the ridiculous DRM on digital downloads, most people are opting to obtain content illegally. Consumers will come up with just about any justification because the current offerings from Hollywood are just way too draconian to buy in to. For us that is good news and we can't wait for the video industry to follow the music's lead and give up on all of this overly complicated DRM, that really just doesn't work. Like us, In-Stat believes that watermarking will become the preferred way to control the distribution of digital content. It really is win-win because while consumers are free to use the content as they deem fit, it is very easy for Hollywood to catch up with them if they decide to share it with the whole world.

We're not saying we've ever downloaded anything off the internet that wasn't 100% on the up and up, or that we're here to judge those who have. We just thought it'd be fun to post all the various rationales we've heard over the years by those who do to justify their potentially shady activities. Some of these sound like pretty good reasons to us, but we doubt any of them would hold up in court if the MPAA ever came a knocking. Regardless, if you do download gray area content you might want to have a couple of these ready, and by all means let us know which ones we missed.

1. I ran out of tuners on my DVR.
2. I accidentally deleted the show.
3. My DVR hard drive crashed.
4. I don't get that channel in HD.
5. My cable was out.
6. I have satellite and it was pouring rain.
7. I don't live in the US and the show isn't available here.
8. I delete the shows after I watch them once.
9. The show isn't available on Blu-ray.
10. I live in a valley and can't get over-the-air.

Apparently Blu-ray sales aren't increasing fast enough for everyone, in its ongoing plan to not pull a Circuit City, Best Buy is reportedly in talks with CinemaNow and other, unnamed, movie services about launching a digital delivery arm as early as this summer. CinemaNow is well prepared to set up online video stores for others, with Blockbuster (bad example) and Dell already on board. Variety suggests Best Buy could market and sell Internet-connected TVs and set-top boxes that include CinemaNow access, with a shared revenue stream between the two, but nothing is final. Netflix has a hit on its hands with Watch Instantly so think it over, would you give an Insignia Blu-ray player or HDTV a second look if it could download movies?

No, folks -- this is no prank. Time Warner Cable really is throwing caution (and public opinion) to the wind and moving forward with its evil consumption-based internet billing. If you'll recall, we heard that the operator was trialing the method -- which imposes premium rates on big broadband users -- back in early 2008, but now it seems it's quietly hoping to roll it out into more major markets. Starting this month, TWC will start gathering information on its customers' internet use in Austin, TX, San Antonio, TX, Rochester, NY and Greensboro, NC; if all goes "well," consumption billing will hit those markets this summer or sooner. We'll point you to the read link if you're interested in just how outrageous these capped plans look (particularly for internet TV viewers), but we'd be remiss of our duties if we didn't share this gem of a quote from TWC CEO Glenn Britt: "We made a mistake early on by not defining our business based on the consumption dimension." Thanks for clarifying, Glenn-o.

[Thanks Kevin, image courtesy of Corbis]

Since Xbox Live Marketplace was already home to NBC Universal movies and TV (at home and abroad) Microsoft's seen fit to fire back at Sony's PSN announcement with the relatively incremental additions of content from The Weinstein Company and TNA, while mentioning the Video Marketplace has already served up 42 million pieces of content, with its pace doubling since the NXE debuted last year. So far at least, all of TNA's offerings (PPV events from last year) are in SD, while The Weinstein Company hasn't hesitated in tossing up Vicky Cristina Barcelona and Zack and Miri Make a Porno in 5GB 720p files for all interested. Microsoft may not be able to claim "all the major movie studios" (we're guessing Sony Pictures has made their decision on who to support) but they're still finding a way to lead the download-to-consoles race, for now.

Pretty much falling in line with Futuresource's predictions earlier this week, the NPD Group found that the 48-percent of respondents had purchased a DVD or Blu-ray disc, compared to 2-percent who had downloaded a movie or TV show. Download-only zealots who cry foul over the lack of titles available for purchase will find little consolation in the additional 2-percent who digitally rented content. Still, physical media could take a lesson from the new kid on the block, and we'd agree that getting rid of the numerous previews on discs to mimic the "just watch the content, already" performance of streams would be a good start. Prioritize that above including more BD-Live "features," please; based on what we've seen so far, we don't think that's going to be what really pushes people from DVD to Blu-ray, no matter what the poll numbers say.

Whoa, vaquero -- calm your jets. This is just a projection, which may or may not prove to be indicative of reality. That said, there's still quite a lot here to discuss, particularly since we've been hearing so much hubbub over the supposed explosion of digital distribution. Media Control GfK International has forecast that sales of Blu-ray Discs will increase some 150 percent to $2.9 billion, up from $1.1 billion in 2008. For those keeping count, digital distribution only generated $1.5 billion last year, and that's including every penny made from VOD and broadband services. In-Stat analyst Michael Paxton was quoted as saying that the "bandwidth required to stream any type of HD video is way beyond what most households have," and he continued by noting that the "convenience factor is still not there for streaming media." You owe it to yourself to hit up the read link for the full report before blasting your opinion in comments below, but we suppose we can't stop you either way.

It's no secret that the movie lovers of the world are leaning more and more towards that instantly gratifying digital download option, and judging by Q4 numbers, we'd say Netflix has done a better job at exploiting that demand than rival Blockbuster. In a move we're honestly thrilled to see happen, the latter firm is apparently waking up and attempting to play catch-up. Here in the past week Blockbuster has hired on former Philips executive Kevin Lewis as Senior Vice President of Digital Entertainment, a spot that'll be responsible for "strengthening commitment to multi-channel entertainment delivery." Additionally, Robert Barr was selected as VP to Blockbuster.com, a move that signals the company's seriousness about getting its online division formidable. As easy as it is to kick the guy that's already down, no consumer in their right mind wants Netflix running this show solo -- there's a word for that type of situation, and it ain't good for your wallet.

[Image courtesy of Manda Mia]

Read - Kevin Lewis hire
Read - Robert Barr hire

Oh c'mon -- you had to know this was a possibility, right? As Netflix's Watch Instantly service becomes more viable and its library expands, more and more users are going to start tapping into those servers for instantaneous enjoyment. Eventually, suggests Cowen and Company analyst James Friedland, all that instant gratification could lead to more costs, and not surprisingly, it'll be the end-user paying up. As an increasing amount of subscribers use the online streaming feature, Netflix is asked to shell out more cash to studios for the content. Friedland predicts that "the company will charge an extra fee for the service [if it] starts to squeeze profit margins," just like it already did with Blu-ray Discs. We get the feeling most customers wouldn't balk at another $1 per month charge so long as the instant library started to include new releases, but if not, who knows what the backlash would be.

The Apple TV has had some time to mature since hitting the scene years ago, and while its functionality has certainly grown, it's still one of the most low-key products to ever emerge from Cupertino. Marvin's Ask Engadget HD question is about this very product, and given that quite a few of you probably own one by now, why not take a look and contribute?

"The Apple TV seems like a pretty good choice for my living room now that HD content is available and boxee can be added on. Still, I'd be buying into a mostly proprietary ecosystem, so I'm curious if it's really the best choice for a movie set-top-box / home media server. Do your readers have any suggestions one way or the other? Is it really the best, or are there better alternatives that do most of the same tasks?"

Give it some thought and chime in below. Don't worry, we won't call you a fanboy -- promise.

Got a burning question that you'd love to toss out for Engadget HD (or its readers) to take a look at? Tired of Google's blank stares when you ask for real-world experiences? Hit us up at ask at engadgethd dawt com and keep an eye on this space -- your inquiry could be next.

This is it, folks -- the shootout you've been waiting for. We've worked with our brethren over at Engadget Classic to assemble an end-all HD Netflix roundup, which pits the BD-P2500, BD300, TiVo HD, Xbox 360 and Roku Netflix Player against one another. We know you're salivating at the thought of it, so rather than just telling you who emerges victorious, we'll point you over and let you dig in yourself.

Oh, Blockbuster -- what will we ever do with you? After first launching that branded MediaPoint box that all of four people purchased, you're now waltzing into the digital distribution party a few months late. According to a somewhat ambiguous report issued this morning, the movie giant has teamed up with Sonic Solutions in order to "give consumers access to a vast library of premium digital entertainment across a wide assortment of home and mobile electronic devices." In other words, those kosher with downloading content via Sonic's existing CinemaNow products and the like can soon have Blockbuster material on their handhelds, laptops and LCD-equipped threads. At least initially, BB will still be selling this material on a pay-per-view type system, though a subscription model could be implemented (read: should be implemented) shortly.

[Via CNET]

Connected TVs are being blasted out hot and heavy here at CES, so it's a good thing that early studies are showing quite a bit of consumer interest. New research carried out by Oregon Networks has discovered that 71% of respondents would prefer a media browser to be installed within their next HDTV, and if for some reason it didn't, 45% said they'd be inclined to download one while 29% "definitely would" download one. Researchers also found that online video portals such as YouTube and Hulu were seen as value-add inclusions, and having them baked into HDTVs would enable families to spend more time together enjoying the spoils of digital video. Moreover, those polled voiced their love for being able to access networked media around the home on their sets, which makes us wonder if either technophiles were intentionally asked or if the world really is swaying to appreciate media streaming.