With the launch of the Spotify App for the iPhone interest for streaming music is higher than ever. There seems to be no limit for its reach, with new users streaming free music every day, changing the way people think about ownership of music forever. And it’s spreading.

LoveFilm, the video rental company that sends DVDs directly to your door, has announced a new (and for some films completely free) online streaming service that could completely change the way films are rented. With films available immediately at your fingertips , ‘traditional’ rental companies like Blockbuster would have to think long and hard about how to compete. Their sluggish uptake of the LoveFilm model of sending DVDs to your door hurt them badly, and if they make the same mistake this time around, it could spell disaster.  Admittedly, most films are currently ‘pay per view’ when streaming, and with the average internet download speed being where it is the quality of the films is not exactly ‘Blu-Ray standard’. But the room for expansion is massive, and with broadband speeds constantly increasing surely the only way for this market is up.

With the prospect of such a big market there have been rumours that Google, as always, may be throwing its hat in to the ring. Following trials that included making the movie Ghostbusters available on the site to watch for free for a limited time Google-owned Youtube have apparently been in talks with Sony and Time Warner to discuss an online streaming service and the effect was dramatic. Shares in Blockbuster dropped by 10% overnight!

Streaming films online is nothing new however, for years films have been available on illegal (but popular) websites, even on YouTube as it is today some films can be found. It is with these sites that LoveFilm and similar sites will have to compete, and this will be a difficult task, with many people simply not willing to pay to watch a film online. If YouTube brings films to our screens for free It will be very interesting to see what advertising formats open up to support these new content distribution channels and, importantly, whether 'free' can really support content which has, up until now at least, been considered premium.