According to a report from The Hollywood Reporter, Blockbuster is secretly working on a device which will allow video content to be streamed directly to a TV.

It seems like the new device will be ready for launch this month, but there are no other details such as its technical abilities or the price.

However, The Hollywood Reporter noted that the content will be provided by Movielink, a former joint-effort of MGM, Paramount, Sony, Universal and Warner, which was acquired last year by Blockbuster. Movielink has a library of 6,600 movies.

A Blockbuster spokesperson declined to comment about this specific rumor, but it confirmed that they are working with various partners “about products, services, alliances and initiatives that can help us achieve our mission to transform Blockbuster into a company that provides access to media content across multiple channels”

So far, Apple TV has failed to be a success, but in January at MacWorld, Steve Jobs introduced a new, cheaper, version, along with the introduction of movie rentals on iTunes.

Apple TV Take Two has a new software that ensures a seamless integration with Movie Rentals, allowing movie fans to rent and watch movies right from their widescreen TV, with no computer required. Also, it can be used for viewing photos from the computers, Flickr and .Mac Web Galleries.

A 40-gigabyte model is sold for only $229, while a 160-gigabyte model costs $329. Besides Apple TV, Blockbuster will compete against the device promised earlier this year by Netflix and LG. Netflix already allows subscribers to stream a selection of films to their computer screens at no extra cost. The company offers more than 90,000 titles on DVD and around 6,000 titles via the Internet.

Also, Amazon Unbox, the movie service of the online retailer Amazon is available on TiVo boxes since last year.

Earlier this week, Blockbuster added in its stores Blu-ray movies for rent and sale. The offer will become available in stores across the United States and Canada, as well as domestic franchise locations.

Blu-ray kiosks will become available throughout Blockbuster stores, the company said, adding that in addition to the Blu-ray titles available online, it will also begin offering online subscribers a preference setting which will automatically indicate if they wish to receive all available titles in this format via their mail service.

Regarding the kiosks, the company announced that they will feature a 42-inch high-definition TV with movies, via a PlayStation 3 console, in order to reinforce the idea that “PS3 consoles double as Blu-ray players.”