Apple may be poised to begin offering online video rentals -- potentially competing directly against BlockBuster, NetFlix and other on-demand video download outlets.
The report, published in the Financial Times, says the hardware maker is in "advanced talks with Hollywood's largest movie studios" to begin selling 30-day access to on-demand videos for $2.99.
Plans call for digital rights management features that will allow the online films to be downloaded onto a computer and transferred to one other device, such as an iPod or an iPhone. The DRM software will be designed to prevent copying.
Apple already sells downloadable movies via its iTunes online store. The sales differ from online rentals, since buyers own the films and can watch them as often as they wish.
While Apple currently enjoys distribution deals with Disney and Paramount, other studios have been slow to join in due to fears that DVD sales would suffer if consumers could easily purchase their films online. However, online rentals are less likely to cannibalize DVD sales, making Apple's proposed rental service significantly more attractive to the studios.