Hollywood opposes Apple's planned movie rental service

After becoming the first major digital media portal to offer movies to download and purchase, Apple Inc. is now planning to launch a movie rental service, complementing the digital movie downloads that are already sold at Apple's iTunes web site, sources familiar with the plans said Monday.

The computer maker turned Internet jukebox powerhouse is said to be in advanced talks with the major film studios to launch the movie rental service this fall, which could challenge the domination of cable and satellite TV operators.

Apple already offers movies for download and purchase via its universal online iTunes Music Store. iTunes users already download and buy movies made by The Walt Disney Co. and Viacom Inc.'s Paramount Pictures.

This year in February, Lions Gate Entertainment Corp., a Canadian entertainment company, entered into a distribution partnership with Apple Inc. to offer movies for purchase and download through online iTunes Music Store, becoming the third studio after Paramount and Disney to partner with Apple since the launch of its movie download service last year.

The world's most popular online movie store carries over 400 movies (with the addition of Lionsgate), more than 4 million songs and 350 TV shows that can be downloaded and played on Apple's revolutionary iPod digital media players.

Movies purchased and downloaded from the iTunes Store can be viewed on a computer, fifth generation iPod and, soon, Apple TV, and most are priced at US$9.99 each. Movies downloaded from the iTunes Store are downloaded in near-DVD quality at a resolution of 640x480.

Priced at US$299, Apple TV can connect computers and TVs without wires and can send movies and TV shows over a wireless connection from computers to widescreen sets. The device, which is compatible with both Mac OS X and Windows, can store up to 50 hours of videos, 9,000 songs or 25,000 photos in its internal 40-gigabyte hard drive.

The planned video-on-demand service is expected as early as this autumn and would allow users to download movies for $2.99 and keep them for 30 days, according to the sources who requested anonymity because film licensing talks are preliminary.

Apple’s planned online movie rental business, which it reportedly is trying to launch sooner to coincide with the planned June 29 introduction of its iPhone, drew skepticism on Monday from some Hollywood studios who questioned pricing, copy protection and the timing of a possible launch.

Most of the studios are unwilling to license movies to the Cupertino, California-based firm to rent because the company will not update its software to make it recognize pirated content and prevent it from being transferred to an iPod or iPhone, the sources said.

Besides the piracy concerns, objections to Apple's rigid pricing have kept many major studios, including Universal Pictures, a unit of General Electric Co., Twentieth Century Fox, which is owned by News Corp., and Sony Pictures, a unit of Sony Corp. from selling its movies on Apple’s online movie store.

Apple declined to comment on “rumour and speculation” about the movie rental plans.

After igniting the personal computer revolution in the 1970s with the Apple II, the Cupertino, California-based Apple reinvented the personal computer in the 1980s with the Macintosh. Continuing with its tendency of revolutions, Apple is leading the industry with its award-winning desktop and notebook computers, OS X operating system, and iLife and professional applications. In digital music segment, it is moving ahead with its iPod portable music players, iTunes online store and most recent its upcoming much-hyped, iPhone.