Yes this device is a wireless hotspot for media streaming. It does not include storage, instead you attach external storage.
You will need an external storage device to hold any movies you want to take with you. Any USB external hard drive is compatible.
A 1 TB USB hard drive should hold at least 200 HD movies. Something like this would be compatible: http://www.amazon.co.uk/dp/B00KWHJY7Q
Next you need the Verbatim APP for each of the iPads that will stream from. Click the following link, or search for 'MediaShare' on the App Store on each iPad: https://itunes.apple.com/ie/app/mediashare-wireless/id641926674?mt=8
You can view the Verbatim quick Setup Guide here:
Scroll to the end of the page for the link to the PDF guide. It's quite short, the steps are clear and it uses images to show how to use it.
There is one problem with all of this though. Movies purchased in iTunes or Amazon Fire will only play in iTunes or Amazon Fire. Content from these sources has built in Digital Copyright Management that restricts playback. This means you will not be able to play your iTunes and Amazon content using this method. Please read this Lifehacker article for sources of non DRM content that will work with this setup:
If you wanted to stream your iTunes Movies to these iPads you would need to use Apple's Home Sharing. You would need a computer running iTunes to use this method. You would need to install a Mac mini in the car. This is possible but you would need some knowledge of electronis and power supplies. The Mac mini is small, and local car stereo specialist might be able to help you with this. Once you have a Mac mini installed in the car you can setup Home Sharing. https://support.apple.com/en-us/HT202190
I hope this helps, please reply if you have any questions.