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Fox teams up with Apple for online movie rentals

Apple has reached a deal with Fox to distribute their movies online for rental.

According to the Financial Times, Apple and Fox have reached an agreement to serve up Fox's movies for rental on iTunes. If true, this would mark the first rental deal that Apple has been able to reach with a movie studio. In the past, they have distributed Disney movies online, but only for purchase at a higher price. Rumor has it that Apple has settled on the $2.99 price point for rentals, as opposed to the $9.99 or $14.99 price to own.

The Financial Times further speculates that Apple will make this announcement at Macworld on January 14th. They also report that Apple is also in talks with Sony, Paramount, and Warner Brothers to make their movies available for rental as well.

Apple entering the online movie rental business is big news. I can almost feel Netflix, Amazon Unbox, and Blockbuster shaking from here. Even though their model would be per-movie as opposed to subscription based, you can bet it will still be a success. Apple has effectively crushed the competition in the online music market (which includes several competitors with subscription based models) and they are no doubt looking towards a similar takeover of online movies.

Of course, Apple's giant install base of iPods and iPhones will help their cause here. We may even see a boost in Apple TV sales if their selection of online movie rentals grows. We have yet to see a set top box from Netflix or Blockbuster, but Amazon Unbox struck a deal with TiVo a little while ago to offer up their movie downloads on TiVo DVR's.

Only time will tell how this one is going to turn out, but there are a lot of big players at work here, all with big ideas, so this will be interesting. Is the online video distribution holy grail finally upon us, or does Apple not have what it takes to revolutionize yet another industry?