The release of Microsoft’s video and music downloading system has sparked an urgency for Internet webcasting businesses trying to convince movie studios to supply them with videos at the time that video rental stores get them.

If a deal happens between webcasters and a major studio, it would effectively change the basic structure of the home video rental market. Sightsound.com, is one of the first companies to provide downloadable movies on a pay-per-download basis. They’re targeting college students and had their first Internet premiere with the popular art-house flick, Pi, at $2.95 per download.

It’s not clear yet how the Internet will affect the home video stores or how far studios are willing to go to protect video stores. At the moment the movie industry relies on the home video market for significant revenue. As the downloading and webcasting technology continues to improve and the subsequent demand for content increases, studios will be hard pressed not to turn to the Internet as an additional outlet.

Meanwhile, webcasting Internet businesses are positioning themselves for what they’re betting will be the inevitable: major movie titles for pay-per-download.

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