Not content with just selling movies and music online, Apple is now engaged in talks with major movie studios about renting movies for a paltry amount of US$ 2.99 for a 30-day rental period.

This may be a challenge toward existing cable and satellite TV companies, most of them offering Video-on-Demand (VOD) which lets people download movies into their cable box or gain access to premium programs.

This move may prove to be advantageous to Apple, who already sells films through distribution deals with Walt Disney as well as Paramount. Other entertainment moguls are hesitant to make deals with Apple simply because of fear that online distribution may hurt optical media sales.

But because of the 30-day limit made possible by the Digital Rights Management (DRM) technology, DVD sales will unlikely get affected by Apple's proposed download-to-rent format, purportedly to be launched in autumn.

A studio executive has acknowledged that Apple's plan would most likely "compete against cable companies and anyone else offering VOD into the home". VOD and similar formats have already become a staple for the cable TV industry such as Comcast, DISH Network, and TiVo. Apple's edge over them, however, is that it has a larger customer base.

Currently, Sony Pictures Entertainment, 20th Century Fox, Paramount, Metro-Goldwyn-Mayer, Warner Bros., and Disney have no comments regarding this issue, though the inside buzz have studios getting inwardly excited with Apple dabbling in the VOD market. Says one studio executive, "When you think about Apple customers they are so connected to the brand they will try anything to do with it."