A report in the Financial Times says that Apple and Twentieth Century Fox have reached a deal to provide movie rentals on the iTunes Store:
Apple has signed News Corp’s 20th Century Fox studio to a new online video-on-demand service in a deal that could change the way people pay for online film content.
The agreement will allow consumers to rent the latest Fox DVD releases by downloading a digital copy from Apple’s iTunes platform for a limited time, according to a person familiar with the situation.
The deal is just the tip of the iceberg. If Fox is the studio that we know about, Apple is most likely negotiating with the other large studios (Universal, Warner Brothers, Paramount, MGM/UA, Sony/Columbia TriStar, etc.) as well.
Disney currently sells their full line of films on iTunes while Paramount, Metro-Goldwyn-Mayer and Lionsgate sell older library titles.
In addition to the impending iTunes video rental agreement the FT reports that Apple will also extend their FairPlay digital rights management to allow the studio to include an iPod-compatible version of the movie on the DVD.
A digital file protected by FairPlay will be included in new Fox DVD releases, enabling film content to be transferred or “ripped” from the disc to a computer and video iPod. DVD content can already be moved to an iPod but this requires special software and is considered piracy by some studios.
Look for the iTunes video rental deal to be announced at Macworld.