Video retailer Blockbuster (NYSE: BBI), in the middle of a big reorg of its offline rental business, is working on a set-top device for streaming films directly to TV sets, similar to what Netflix (NSDQ: NFLX) announced at CES this year with LG Electronics (SEO: 066570). The announcement is expected to come this month, reports THR. This device would be an offshoot of Movielink, the online film service Blockbuster acquired last year for pennies on the dollar.

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‘This comes as BB it trying to reinvent itself and its stores as multimedia hubs, not just video, so much so that the company is now calling itself “Blockbuster Media”, instead of just “Blockbuster Video.”. Of course this move could also cannibalize some of the in-store revenues.

Much like Netflix, BB will be working with a consumer electronics company to share the set-top box costs.