iTunes Movie Rentals Coming From Fox? (AAPL, NWS)

Are movie rentals finally coming to Apple’s iTunes? The Financial Times says Apple has signed on News Corp.’s 20th Century Fox to offer rentals of the studio’s latest movies via Apple’s digital media store. The companies could announce the deal at next month’s Macworld conference in San Francisco. (The FT says Jan. 14, but Steve Jobs’ keynote, during which Apple usually makes its biggest announcements, isn’t until Jan. 15 at 12 noon ET.)

If true, this is great news for Apple, which has only managed to court Disney (DIS) to its movie store so far. Plenty of competitors already sell and rent digital movies online, such as Amazon (AMZN) and Netflix (NFLX), but the process is complicated by lousy software and digital rights management (DRM) technology that doesn’t work with Macs or Apple’s market-dominating iPods. A well-designed, iPod-friendly digital movie rental service with the right selection and pricing structure could be a big hit.

Beyond digital movie rentals, the deal could also permit consumers to rip a digital copy of their Fox DVD movies to their computers, to play via video Apple’s iPods (and potentially via the company’s Apple TV gadget) — an idea we love. From the FT:

“Apart from letting people rent online, Apple will also for the first time extend its FairPlay digital rights management system beyond its own products.

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.”

Follow-up: Six Questions About Apple’s iTunes Movie Rentals

See Also: How Steve Jobs Can Fix Apple TV
Apple At Macworld: Tiny MacBook, No 3G iPhone?

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