Blockbuster Video said Monday that it has made the commitment to DVD, planning to roll out the digital video format’s players and software titles to its 3,800 stores nationwide and 1,000 retail locations overseas by the end of the year.

The No. 1 vid rental chain said it hopes the move will enable it to become “the global leader in rentable DVD.”

Until now, Blockbuster, a division of Viacom, has been slow to adopt the format, losing DVD rental market share to No. 2 rental chain Hollywood Video, which has strongly supported DVD with considerable shelf space at its 1,300 stores since the format’s introduction in late 1997.

Currently offering DVD in only 900 of its 6,600 stores, Dallas-based Blockbuster said it has been waiting for more consumers to embrace DVD, attributing the move to the fact that “DVD has far surpassed original projections.”

By the end of the year, DVD players are expected to make their way into 4 million American households. Nearly 40 million U.S. households are projected to purchase the players by 2007.

Initially, Blockbuster stores will feature at least 200 film titles for rental in the DVD format with additional titles added each month.

The move is expected to provide a major revenue stream, appealing not only to customers but sweetening shares for investors in the company’s yet-to-bow IPO as well.

The new strategy also reflects the company’s sudden interest in technology. Also late to the e-commerce party, Blockbuster said this month that it is gearing up to become a major e-tailer by selling videos and DVDs through its Web site.

“Now that DVD is going mainstream, we want it in all our stores so that this exciting product is easily available to the public,” said Blockbuster chairman and CEO John Antioco.

Blockbuster said nearly 60% of U.S. households live within a three-mile drive of a Blockbuster store. By carrying DVD, it could play a major role in pushing DVD even further into the mainstream.

“We think this is exciting news for the industry and a major reason analysts are predicting growth in the category,” Antioco said.