Apple iTunes to offer 99-cent TV rentals

Apple is said to be in discussions with media companies to provide TV episodes

Seeking to build on iTunes' dominance as the biggest music retailer, Apple is set to offer a new on-demand service that will allow iTunes users to rent TV shows for 99 cents. The new on-demand service is expected to be unveiled on September 7 in San Francisco, just two weeks before the start of the new fall TV lineup.

Apple is said to be in advanced talks with News Corp. about the deal, and is discussing the plans with other media companies such as CBS Corp., NBC Universal, and Walt Disney Co., according to Bloomberg and The New York Times. The information was reportedly leaked from network executives who were not authorized to disclose the information to the public, so their names have not been released.

The deal will be a bold new move beyond Apple’s current TV offering, Apple TV, where users can buy—but not rent—individual TV episodes for $1.99 and $2.99 each.  Currently, only movies are available for rent. 

Apple TV was launched in 2007, but has not experienced the same explosive sales rates as Apple’s other devices, such as the iPhone and iPad. 

In the past, Apple CEO Steve Jobs has commented on the frustrating process of attempting to work out Apple TV deals with cable and satellite providers, and according to Bloomberg’s anonymous sources, early discussions had initially centered upon a subscription TV service, but that idea was quickly dropped by the media companies who did not want to jeopardize revenues from cable service providers.

The new Apple TV service—which is rumored to be called iTV—will allow users to rent TV episodes, which will be made available on iTunes 24 hours after their airing, for up to 48 hours.  The move is anticipated to put up a fierce front against major competitors Netflix, Amazon and Hulu—not to mention Google, which recently teamed up with Intel, Sony, and Logitech to release Google TV. 

“This is a smart move for everyone,” said RBC Capital Markets analyst David Bank to Bloomberg.  “Something like this a la carte rental service is an incremental opportunity.”

Along with its announcement of the made-over Apple TV, Apple is also expected to unveil its new iPod Touch with a higher-resolution screen, as well as a new version of the Apple TV set-top box. 

Apple representatives could not be reached for comment.

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