The Reliance Anil Dhirubhai group is setting up a DVD and VCD rental and distribution business, leveraging a range of delivery channels from retail stores, the internet and mobile phones.

The group is setting up 500-700 DVD/VCD retail outlets across 50 cities on the lines of the US video rental distribution network, Blockbuster. The 250-odd Reliance WebWorld outlets will also be used as centres, enabling the customers to choose VCDs and DVDs. The WebWorlds currently offer Internet, gaming, Reliance phone connections and bill-paying facilities.

The company is still working on the rentals and lending terms. But the consumers can expect to pay around Rs 300 a month for up to five DVDs, which can be replenished only when all the five are returned.

The group is considering a range of delivery options. For example, the non-resident Indians can log on to a new portal called Bigflicks.com to view their favourite movies streamed online to their TV sets.

The customers could also SMS the name of the desired movie through a Reliance phone and the same would be delivered to their homes. Blockbuster is the world's largest rentable home entertainment company with over 6,000 stores in the US.

It also has operations around the world, including Canada, Israel, the UK, Brazil and Argentina. In the US, the company claims to have over 70,000 DVD titles.

The ADAG's video rental foray will face competition from other players keen on entering the domestic home video rental space. Harish Thawani's Nimbus group plans to invest $34 million.

Moser Baer, which drastically cut the DVD film prices recently, is also getting into the business through its portal that offers videos for as low as Rs 28. Bangalore-based Seventymm.com offers a choice of 15,000 titles at Rs 599 a month for unlimited video rentals over the net.