The Financial Times has just reported that Apple has been in talks with major movie studios about launching an online movie rental service. Currently Apple allows users to download movies through iTunes to own, but only has agreements with Disney and Paramount as most studios have been reluctant due to the hit the service could have on regular DVD sales.
Studios may be less hesitant with an online download rental service since it’s less likely that it would affect the sale of DVDs. The rental term of each film would be for 30 days at $2.99 and the file would come with a DRM that would prevent the films from being copied but would let it be transferred from the computer to at least one other device such as a video iPod or the upcoming iPhone.
Studios themselves might not see the download service as a threat to sales but places that offer VOD (video on demand) services such as Comcast, DirecTV and Xbox Live would be the most likely to take a hit. Their services work in a similar fashion by allowing a limited-time rental of a digital movie, but their deals for the most part would pale in comparison to the reach that Apple has and to a rate of $3 for 30 days. This will be one to watch.