News Corporation and Apple are close to announcing plans to make the latest films from Twentieth Century Fox available to rent online through Apple's iTunes.
In a deal struck between the maker of the iPod gadget and News Corporation, the parent company of The Times and owner of Fox, consumers will be able to rent the latest Fox DVD releases by downloading a digital copy from Apple's iTunes platform for a fixed period.
It is understood that Apple has been trying for months to persuade Hollywood studios to sign up to a digital rental model, in which subscribers would be able to download and view films for a set period, but until now no studio had agreed to a deal.
Studios are understood to have had concerns over issues such as pricing and piracy.
A number of Fox television shows, such as "24," and Walt Disney programs are available to buy on iTunes. Apple's chief executive, Steve Jobs, is a big shareholder in Walt Disney and sits on its board.
Disney is the only studio that sells both new releases and older films on the site, but it does not offer a rental service.
Other studios, such as Paramount Pictures, Metro-Goldwyn-Mayer and Lionsgate, sell older films through iTunes.
The latest deal could help Apple to boost its video offerings. Sales of video on iTunes have failed to grow at the same pace as the site's music downloads. Apple TV, the network device designed to play digital content originating from any Mac OS X or Windows computer on to an enhanced-definition television, has been a poor seller.
Details of the arrangement between Apple and News Corp., such as the pricing structure and whether all new releases will be available to rent, were unclear.
The pricing is likely to be competitive, because Apple will be competing with rivals such as Amazon's Unbox video downloading service, which sells films at relatively low prices.
Amazon says that Unbox offers television shows, films and other videos from more than 30 studios and networks. The cost of television shows is about $1.99 an episode and films cost between $7.99 and $14.99.
Fox has been experimenting with the way it offers films online and, like Sony and Viacom's Paramount Pictures, already sells films through Unbox, which was launched in September 2006.
Recent Fox films include "X-Men: The Last Stand" and "Ice Age: The Meltdown" and the studio has an extensive library.
The Apple and Fox deal is expected to be announced at the Macworld expo in San Francisco on January 14. It is unclear whether Apple will sign deals with the other studios in time for Macworld.
Fox is reportedly also planning to release DVDs that use Apple's digital-rights-management system, a move that will enable consumers to make legal copies of the disc that could be played on an iPod or other device, such as a computer.
News Corp. said recently that the media group was in talks with Apple, but it refused to elaborate.
It is understood that Apple has been in talks with some of Hollywood's largest film studios since June to start an online film-rental service aimed at competing with cable and satellite television broadcasters.
News Corp. refused to comment. Apple was unavailable for comment.
Apple's shares topped $200 for the first time on Wednesday, pushing the iPod maker past Cisco to No 2 on the list of Silicon Valley's most valuable public companies. Its stock price hit $202.96 Thursday and was bobbing around $200 in midday trading Monday.
The stock's move came amid bullish news about sales of Apple's products from Amazon.com, which said that the Macbook laptop ranked among the top-selling computers on its site this holiday season.
FOXNews.com is owned and operated by News Corporation, which also owns and operates the Twentieth-Century Fox film and television production studio and the Times of London.