BLOCKBUSTER TO RENT DVD MOVIES AT 500 LOCATIONS.

Byline: Dave McNary Daily News Staff Writer

Home video giant Blockbuster, in a major endorsement of the digital versatile disc format, announced Wednesday that it will begin renting DVD players and titles at 500 stores by the end of the year.

The program will enable customers to try out the much-hyped format at minimal cost. Starting this month, stores will rent Philips players for no more than $15 and offer 350 rental titles and 150 for-sale titles. Bare-bones DVD players currently retail for about $300.

``The deal with Blockbuster is a very key move in the rollout,'' said Thomas Adams, president of Adams Media Research. ``Before people buy DVD, they've got to see it and then compare it with their cable feed.''

The stores, representing more than 10 percent of the chain's domestic outlets, will include kiosks for demonstrating DVD.

DVD discs, which are the same size as audio compact discs, offer digital clarity, six-channel sound, massive background information and instant rewind. Adams projects 1 million players in U.S. homes by the end of the year.

Blockbuster, a major factor in the rise of parent Viacom Inc. this year, began testing DVD products in about 100 stores in April 1997 shortly after the format's launch. It said outlets in the Los Angeles market would be included in the DVD program but gave no locations.

Adams said Blockbuster's move is reminiscent of the early days of videocassette recorders 20 years ago when stores began renting VCRs to customers, a step that helped lead to massive acceptance of the technology.

DVD sales are expected to be strong during the upcoming holiday season with expanded offerings from discount retailers like Target, Kmart and Wal-Mart.

Analysts believer the format faces competition in the short term from the rival Divx pay-per-view format and, over the long term, from digital cable TV.