• Financial Times, Tuesday, September 11, 2007 10:47 AM

The Financial Times breaks the news that Apple is in talks with the Hollywood majors about launching an online film rental service to challenge the likes of Comcast, Time Warner Cable, Netflix, Microsoft's Xbox Live and just about anybody else in the movie rental/video-on-demand business. However, Apple would certainly have the edge in distribution through both its iTunes media store--which reaches millions worldwide--and its suite of consumer electronics offerings, like the iPod, iPhone, Apple TV, and its line of Mac PCs. Apple already sells movies from Walt Disney and Paramount on iTunes, but it doesn't yet rent them out.

In the past, movie companies have been reticent about joining forces with Apple because they didn't want to infringe on DVD sales, but FT says studios will be more excited about a video-on-demand service, because rented films aren't seen as cannibalizing on sales. Apple didn't comment on the story, but the report says pricing would be $2.99 for a 30-day rental, with digital management rights software to prevent illegal copying. Users would be able to move the films to one other device. The service is said to launch sometime this fall.

Completely separately, Apple on Monday assuaged investor concerns that the iPhone price drop was due to slower-than-expected sales. Not at all--the iPhone just reached the impressive milestone of 1 million customers after 74 days on the market, three weeks ahead of Apple's expectations.

Read the whole story at Financial Times »