As plunging CD sales attest, downloading has forever changed the music industry. Will the movie- and TV-rental business be next?

Renting movies or TV shows with a few keystrokes already is becoming more commonplace and promises to become even more popular with last month's entrance by Apple.

Buoyed by the success of its highly popular iTunes music store, Apple announced it will begin offering downloadable movie rentals ($3.99 for new releases and $2.99 for older ones) to video iPods or iPhones. All the movie studios are on board for this deal, giving consumers a wide choice with the easy-to-use iTunes interface.

Mail-order DVD rental service Netflix countered by announcing that it would offer its subscribers at the $8.99-a-month and higher levels unlimited streaming movies and TV episodes, while basic level ($4.99 a month) subscribers get two hours of free streams. Netflix offers around 6,000 titles for streaming and plans to increase the number in the coming months.

These are just the latest moves in the growing movie- and TV-download business. An Adams Media Research study projects consumers will spend $4.1 billion a year by 2011 on movie and TV downloads.

Everyone, it seems, is getting into the act.

Cable channel HBO has begun offering movies and series as downloads in Green Bay and Milwaukee, and expects to gradually roll out the service to the rest of country. Cable network Starz launched its movie download service Vongo a year ago, under which subscribers, for a $9.99 monthly fee, can download films and concerts, along with a live streaming channel of Starz programming. And online retailer Amazon offers the Unbox video downloads: TV shows and movie downloads can be watched on TV or transferred to compatible portable devices, including Plays for Sure media players.

But as much as movie and TV downloads are growing, they're still facing competition from cable and satellite on-demand services, which offer a selection of movies with no extra hardware or download time required -- and in many cases, for no extra charge.

Earlier this week, Comcast announced that it will offer its subscribers a larger library of video on demand, with some new movie releases available the same day they're released on DVD, and TV series premieres a week before they're broadcast. The content will be available on Comcast's Fancast online site.

There also has been disruption in the emerging movie download business. Most notably, Wal-Mart exited the business less than a year after launching it last February. A major stumbling block was that the downloads didn't work with standard DVD players or the iPod. Customers were limited to watching them on computers and some portable devices.

Other changes in the industry have seen Movielink, which originally launched with substantial support from five movie studios, purchased in August by Blockbuster, which itself has been struggling with growing competition from Netflix as well as the download players.

Management at Movielink and CinemaNow, the relative old-timers in the legal download business, say they welcome the new competition from iTunes. Blockbuster/Movielink company spokesman Randy Hargrove believes Apple's entry in the download rental business will accelerate consumer awareness and acceptance of the idea of renting movies via download. "We believe Blockbuster is well positioned to take advantage of the increased demand."

CinemaNow chief executive officer Curt Marvis agrees. "The digital distribution business is still very much in its infancy. Apple has proven its ability to help create markets, whether it's been around portable music players or digital distribution of music. Ultimately, that's good for every company that's in this business, including CinemaNow."

With a more crowded playing field, download services are looking at ways to make themselves more attractive and accessible to the movie rental audience. CinemaNow recently announced a partnership with Macrovision, which will allow downloads on Macrovision-enabled digital TVs and set-top boxes.

Blockbuster, meantime, has big plans for Movielink, and is trying to combine the best of two worlds: a brick-and-mortar presence through its chain stores, with the convenience of being able to download movies at home. "Our mission is to be the brand known for giving consumers convenient access," Hargrove says.

Hargrove says the company's goals are to grow its core movie rental business and embrace new technologies. "One of the things we try to do is see how we can integrate the [Movielink] service with our Blockbuster site."

Still, when Blockbuster took over Movielink, it inherited a company that was losing money. Hargrove says they've made some changes in how the business operates and adopted a new marketing strategy.

Blockbuster has been experimenting with kiosk DVD rental outlets in Lexington, Ky., and may also introduce kiosks where people can download rentals.

For consumers, the number of choices can be overwhelming. Michael Muchmore, lead software analyst for PC Magazine, had been tracking the different companies and options.

"Netflix has a jump start on Blockbuster, with online movie rentals already included free with subscriptions," he says. "Apple is a relative latecomer but brings easy integration with video-capable iPods and with Apple TV, which will make the jump from the PC to the TV simpler.

"CinemaNow has a large library and lots of options, including player-compatible DVD burning and personal media player support -- things lacking in Blockbuster's Movielink acquisition."

But downloads have their disadvantages, Muchmore adds. "Since you can rent lots of movies on-demand from cable operators, what's the advantage to renting from your PC? Video quality, too, has to get better with the downloads. Amazon's Unbox is tops in this area currently, and its ability to directly send movies to TiVo gives it a leg up in the PC-to-TV problem."

In addition to the time it takes to download a full-length movie and video quality issues, many of these services have limitations and restrictions that can be confusing.

Two examples for consumers to consider:

• Check to see whether the service works on all systems. Some, including the Netflix streaming movies, only work with Windows systems or with newer versions of Windows. Some allow burning a copy to DVD for purchases. Others are streaming only.

• Time limitations. With iTunes and Amazon, one has 30 days to start watching the movie, and 24 hours to finish watching it once it starts. Some iPod owners were upset to learn that the downloads only worked on the video-enabled iPods that went on the market last September.

While the number of people who have tried these services is growing, it's hardly a mainstream habit yet.

"It's a lot easier now than it was a year or two ago," CinemaNow's Marvis says. "But it's still not as easy as it needs to be to really penetrate the mass-market consumer population. That's a lot of what we're working on right now -- trying to create a usability for our site and service so that anyone can sit down and figure out how to use it."

As Marvis notes, the digital delivery industry is still very young. He compares what's happening now to the advent of cable and video in the early '80s, when people made the shift from three networks to a wide selection of channels and no longer had to wait a few years for movies to be broadcast on TV because they could rent them.

"Change takes time. It's a major shift in how people will consume content for the next 20 years."