From its inception in 1998, Netflix has been tinkering with the way Americans consume movies. For starters, it was the first video store without walls and a roof, doing all its business online. It offered only DVDs long before other chains switched from the VHS mentality. And while there may be a waiting list for a given movie or TV show, Netflix’s catalog of 80,000 titles far exceeds the inventory — particularly of art house, classic, and foreign titles — of any brick-and-mortar video chain.

Under this business model, Netflix has rapidly carved out a giant niche, to the tune of nearly 7 million customers — everyone from the suburban office dweller to the broke college student who, in lieu of a television, relies on his laptop and those incoming red envelopes for an evening’s entertainment. Ask any movie buff about the most common Netflix service, and they are bound to have it memorized: $19.99 a month, unlimited rentals, three titles at a time. In fact, that standard monthly rental plan is now $16.99, a reduction that speaks to the mounting pressure placed on Netflix by such online competitors as Blockbuster (two weeks ago, Netflix announced the first quarterly decrease in customers since the company was founded).

But bigger things are brewing at Netflix than a new pricing strategy. During the last few months, the company has unveiled two new initiatives (and there are widespread online rumors about a third) that will try to reinvent a portion of the company’s mission and business model. If most rental stores are in the business of taking a studio’s films, storing them in inventory, and sporadically charging customers to rent them, the Netflix mission is playing out on a far more global scale: Rather than merely housing a studio’s films, the company wants to aid in the acquisition and distribution of the movies its users want to rent; and rather than simply rent out a physical object, Netflix aims to digitize its library and offer an entirely new way of exhibiting its 80,000 titles.

In recent years, Netflix representatives have joined the ranks of studio buyers at film festivals around the world, in several cases offering to put up money — sometimes in conjunction with a theatrical partner, other times on their own — to buy the rights to such works as the Maggie Gyllenhaal redemption film “Sherrybaby” and the Ralph Nader documentary “An Unreasonable Man.” In some instances, Netflix then helps that film reach movie screens, before featuring the title in its rental library and recommending it to its users based on its ratings of similar films. In recent months, the rental outfit has also started offering customers the option of streaming movies on their computers — a smaller selection of titles that can be viewed instantly (no more shipping delay) via the Web.

And in recent months, rumors have been spreading online — rumors that company officials do not deny — that Netflix is working on a portable device that will transmit these streaming movies directly to a television. Much as online radio services sell devices that convert streaming audio for a stereo, the larger scheme seems to be an instant Netflix rental service — transmitting movies from the Web site directly to a user’s widescreen television in seconds.

Taken together, these initiatives amount to the reinvention of the conventional Netflix business model. Consider the critically acclaimed titles that owe their theatrical lives, in some part, to the rental house: the Iraq documentary “No End In Sight” and the Darfur documentary “The Devil Came on Horseback,” which both opened on New York screens two weeks ago, and Julie Delpy’s romantic comedy “2 Days in Paris,” which emerged as one of the top titles from the Tribeca Film Festival and arrives in theaters this weekend. In each case, viewers saw the logo before the opening credits: Red Envelope Entertainment.

Sabra Slade, head of marketing for Red Envelope Entertainment, said the division’s goal is to acquire about 75 titles a year, and to release around a dozen of those theatrically. Often, she said, these are movies that would not have seen a life beyond the film festival circuit.

“It’s really hard, unless you’re spending $40 million on advertising, to get attention,” Ms. Slade said, noting the cluttered marketplace of blockbusters that obstruct the average art-house entry. “And we were seeing films at festivals that weren’t getting people’s attention, that weren’t given a chance to find an audience, to connect with the people who would be interested in the movie if they knew it existed. If that doesn’t happen, the movie vanishes into the ether, and the people who could have become informed, touched, amused, enraged — they never even learn the movie was out there.”

In an era when most studios view a movie’s theatrical release as little more than a marketing run-up to its DVD release, perhaps it makes sense that Netflix views its Red Envelope division, and the theatrical runs of its acquisitions, as a way of further marketing its rental library. By acquiring these films, Ms. Slade said, and through purchasing and then reselling some rights to other partners, Netflix gets a movie such as “2 Days in Paris” into movie theaters in major cities, generates buzz through reviews and word-of-mouth, and is then able to market the title much more effectively and affordably on DVD to audiences across the country.

Clearly, it makes sense from a business perspective — Netflix can control the rights while offsetting costs and risks with a variety of partners. But from the filmmaker’s perspective, it’s also a promising proposition: a concentrated theatrical release that coincides with a rollout to Netflix’s sizable customer base. Rather than hoping for a limited, market-by-market theatrical run with an independent distributor that might eventually mature into a limited DVD release, Red Envelope Entertainment offers a far more ambitious and far-reaching distribution strategy.

“Take a movie like ‘Hotel Rwanda,'” the director of corporate communications for Netflix, Steve Swasey, said. “It wasn’t a big release, it made a modest $23 million at the box office, but it got great critical reviews and a best actor nomination. And it’s one of the top five rentals of all time at Netflix. It’s outperformed ‘The Da Vinci Code’ or ‘Ocean’s Eleven,’ both movies with huge advertising budgets. There’s an audience for movies like this — they’re watching — and the goal of Red Envelope Entertainment is to bring more movies to the audience that would go out and see them in the theater, if they only had a chance.”

It’s narrowcasting on a mass scale, finding all the small, niche art-house audiences in every city and fusing them together to form a national Netflix DVD campaign. Mr. Swasey is confident that movie theaters will always be in business for the blockbusters, but his company is banking big on the idea that the ways that audiences see movies, and in which filmmakers try to find those audiences, are about to change dramatically.

ssnyder@nysun.com