Popping to the local video store to catch the latest blockbuster is fast becoming a thing of the past withDVD postal-rental services, internet downloads and on-demand TV competing with traditional options for film-lovers' cash.

If you watch a lot of films, signing up for a DVD rental service is a good idea. According to Which?, the consumer organisation, there are about 30 companies that offer rental by post and by next year the services are expected to account for two thirds of the DVD rental market.

Many are powered by Lovefilm, the UK's biggest online rental company. Others include Blockbuster, Amazon and My Movie Stream.

Most services require customers to pay a monthly fee by direct debit, which allows them between one and five DVDs at any one time, depending on which package they sign up for. Users need to create an online “wish list” of films and the company starts to post out the chosen DVDs, which you watch at your leisure and then send back.

If you make good use of your service, you are unlikely to pay more than about £2 a DVD. By contrast, Blockbuster stores charge £3.95 for overnight rental of recent releases. Online rental also offers a wider selection of titles and no fees for late returns. Most DVD rental services offer a two-week trial before you have to sign up, and if you make use of every free trial available, you can watch a lot of films before you have to start paying.

Lovefilm's pricing structure is typical; you can get packages for one, two or three DVDs at a time for £9.99, £12.99 and £15.99 a month respectively, with an unlimited number of rentals. Lighter users can opt for a maximum of two or four DVDs a month for £3.99 and £7.99.

Rob Barnes, head of broadband at Moneysupermarket.com, the comparison website, says: “The beauty of this service is that you never have to pay a late-return fee, postage costs are paid for and you never have to leave your living room.”

He adds that it is now easier than ever to have the latest films delivered to your home and suggests that the traditional video shop could soon become obsolete.

“If you have digital TV or a Freeview box, then you already have free access to FilmFour, though you do not have any choice over which films are shown,” Mr Barnes says. “For those with a cable or Sky package, you may already have Sky Movie channels included in those packages. If you don't, you can add this for £18 a month for ten movie channels.”

BT Broadband customers with a BT Vision box can sign up for a subscription package called PictureBox. For £5 a month viewers can choose from a constant selection of 28 films. At the moment these include The Bourne Ultimatum, Knocked Up, Atonement, The Kingdom and Elizabeth: The Golden Age. Films are refreshed constantly, with new titles added each week.

Alternatively, Tiscali, Virgin Media and BT Vision customers can watch films via on-demand TV. This means that you can watch a film whenever it suits you and can also pause and rewind. In most cases you rent the film for 24 hours. Prices start from £1.99 a film with BT Vision, £2 with Virgin Media and 99p with Tiscali Movies Now. Tiscali has by far the most films for on-demand viewing, with about 2,600 to BT Vision's 550 and Virgin Media's 500.

If you fancy a night out, there are ways to make a trip to the cinema cheaper. Orange mobile phone or broadband customers can buy two tickets for the price of one every Wednesday with Orange Wednesdays. Mobile users need to text “film” to 241, or call 241 from their Orange phone to get their tickets. Broadband customers can sign up online.

If you are a regular cinemagoer consider buying an unlimited pass. Cineworld's Unlimited Card costs £11.99 a month (£14.99 including West End cinemas). Alternatively, many cinemas offer cheap films for certain age groups, such as children's films on Saturday mornings or over-50s on weekday afternoons.

CASE STUDY

Kate Simpson, of North London, has been a member of Lovefilm for two years. The 27-year-old, left, says: “I chose Lovefilm because that's the service I had heard most about and some of my friends used it and recommended it. Also it has every DVD you can imagine and, so far, there has not been a DVD I wanted that has not been there. The website is really easy to use too.”

Miss Simpson pays £15.99 a month and can rent up to three DVDs at any one time. When she has finished watching a film she simply posts it back and another from her “wish list”, which runs to about 100 films, arrives in the post within a couple of days. During an average month she watches about eight or nine films.

She adds: “Another good thing about Lovefilm is that there are no late-return fees, so you can watch the DVDs when you want and not worry about it. It is good value for money for the amount of films I watch. When I used a video shop,

I would be charged about £5 a film and often a late-return fee, too”

Download and watch at your leisure

Apple is the latest company to offer a UK download service for films. Movies can be downloaded from the iTunes website at apple.com/itunes on the same day they are released on DVD.

New releases cost £10.99 and library titles £6.99. Once bought, they can be kept on your hard drive indefinitely.

Rentals cost £2.49 for library titles and £3.49 for new releases, with high-definition versions costing £1 more. Customers who rent films from iTunes have up to 30 days to start watching and then 48 hours to finish each film.

Other sites that allow you to buy or rent films include Lovefilm.com, anytimesky.com, 4od.com (4 On Demand), Vizumi.com and Wippit.com.

To download films, users need a PC or Apple Mac with plenty of space on the hard drive and a broadband connection - the faster the better. Be aware that films are big files and if you go over your download limit you will be charged extra by your broadband provider.