Set-top box movie service Vudu is claiming to offer more High Definition content than any of its competitors — Apple TV, Netflix, XBox 360, and even Blu-Ray itself — reports CNet. And while content is mostly King, I’m still unsure about the company’s business model.

From CNet:

Indeed, a quick examination of competing services seems to bear out Vudu’s claim. We counted more than 1,100 HD movies available through Vudu’s box (including about 200 that are also offered in Vudu’s Blu-rayesque HDX format), compared to 391 on Xbox Live Marketplace, and something south of 700 on Apple iTunes. (Netflix will be kicking off its own HD streaming service later this month with a mere 300 titles.) By comparison, Amazon’s Blu-ray inventory–i.e. the total number of Blu-rays available–shows a total of close to 2,000 titles, though that includes TV shows and pre-release discs.

However, while Vudu’s catalog clearly beats its Internet set-top box rivals, along with holding its own against the fledgling Bu-ray format, there’s little to distinguish the service in terms of pricing – rentals range from $0.99 to $5.99, and purchased movies range from $4.99 to $19.99.

In fact, when you consider that the Vudu set-top box is a one trick pony compared to most of its direct competitors who also offer various additional functionality, such as gaming or the ability to bridge the gap between the PC and TV, the Vudu proposition appears to deliver a lot less value for money: buy our hardware ($299) so that you can start purchasing our wares. It’s like charging people to enter the store. Instead, Vudu should find a way of giving its set-top box away for free or at least making consumers feel like they’re not paying for the box.

How so?

As if porn wasn’t enough to differentiate itself from competitors, this time Vudu (see our early review) has cheapened its set-top box movie service in the right way by offering heavily discounted rentals through its newly launched “99 for 99” movie channel.

As the name suggests, 99 movies will be on offer priced at just 99 cents per rental. Titles will be “personally” chosen by Vudu’s “in-house movie expert” Steven Horn, and will include both recent releases and “classics”, with selections rotated each week.

Once again, this isn’t a last100 give-away but our good friend Dan Rayburn over at Streaming Media is up to his old tricks, this time giving away a Vudu set-top box (see our early review).

To qualify to win the unit, all you have to do is leave one comment on Dan’s original post with a working e-mail address. He’ll pick one person a week from today using a random number picker website and ship it out to the winner at no cost. (Sorry, U.S. residents only) The unit comes with all of the original materials, box, remote and cables.

Seemingly lost in the news of iTunes, the AppleTV, Amazon’s forthcoming online video streaming service, and the newly available Netflix set-top box from Roku, is Vudu.

Vudu, the movie-on-demand service with its own set-top box, has upgraded its software to version 1.5 — ho hum — but this upgrade includes the ability to extend the rental past the 24-hour deadline.

Yipee!

One of the loudest complaints from people who rent or stream video content over the Internet is that they’re given 24 hours to watch a movie once it has started. If the baby interrupts and you can’t get back to “Atonement” in time, tough. You’ve got to rent it again to finish.

Vudu now allows you to extend the rental period for $2 off HD movies and $1 off regular flicks. The option is available for a week after the movie expires; once chosen, you have another 30 days to watch, 24 to 48 hours (depending on the film) after you hit play. The extension is available only once, although we wish it was without an additional cost [Ed. all rentals should be viewable for 48 hours at no extra cost. The studios are just being plain greedy and demonstrating that they still don’t understand viewing habits. Have they never heard of “no late fees”?].

It’s a reasonable amount of time to finish what you started, or watch again. It’s also something that others — ahem, iTunes — should offer as soon as possible.