Apple is in advanced talks with several major Hollywood studios about launching an online movie rental service, to be delivered through iTunes and launched as early as this Autumn.
A single film such as The Simpsons Movie (pictured) will, insiders say, cost $2.99 (around £1.50 if prices are compatible with exchange rates), which will buy you a 30-day rental of the film, after which time it will 'expire' and disappear from your hard drive.
DRM (Digital Rights Management) software will prevent the film being copied, but will allow it to be transferred to at least one external device such as a video iPod.
The service will also provide another use for the Apple TV box, which was criticised at first due to lack of available content and the unit's initially small hard drive.
The first version had a 40GB hard disk, but a hastily-produced 2nd generation unit boasts a somewhat more acceptable 160GB drive.
Apple already has distribution deals with Walt Disney and Paramount, through which it sells films on the U.S. iTunes Music store. But other studios are likely to be more enthusiastic about joining the new video-on-demand service.
One senior studio executive said, 'When you think about Apple customers, they are so connected to the brand they will try anything to do with it.'
Video-on-demand (VOD) is growing fast, especially in the U.S., with many cable, satellite and online companies competing for attention.
But none of the main players have as large a customer base as Apple – and that's tempting the big studios to do a deal with the company.