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Published: Wednesday, 8/25/2010

Apple in talks to let iTunes users rent TV shows for 99 cents


CUPERTINO, Calif. - Apple Inc. is in advanced talks with News Corp. to let iTunes users rent TV shows for 99 cents and is in talks with other media firms about similar deals, said three people familiar with the plan.

Viewers would be able to rent programs from News Corp.'s Fox for 48 hours, said the people, who declined to be identified because the discussions aren't public. CBS Corp. and Walt Disney Co. - where Apple Chief Executive Officer Steve Jobs is a board member and the largest shareholder - also are in talks about joining the effort, the people say.

The content deals would give Apple users access to some of the most-watched shows on TV and increase the appeal of its devices, including the iPad, iPhone, and iPod Touch. Adding programming also would build on iTunes' role as the biggest retailer of music and mobile applications, and help Apple ward off companies like Netflix Inc. and Amazon.com Inc., which offer their own online video services.

"This is a smart move by everyone," said David Bank, an analyst at RBC Capital Markets in New York. "Something like this a la carte rental service is an incremental opportunity."

The episodes would be available to Apple's rental service within 24 hours of their air dates and be commercial-free, one of the people said. Apple plans to hold a San Francisco event Sept. 7, two weeks ahead of the start of the prime-time TV season, to unveil the service, two people said.

Apple also plans to introduce a new version of the Touch with a higher-resolution screen - similar to the display featured on the iPhone 4 - and a $99 version of its three-year-old Apple TV set-top box, one person said.

The new Apple TV, with a smaller hard drive than the earlier version, aims to let people stream content from iTunes, the person said. Apple doesn't comment on rumor and speculation, a company spokesman said.

The a-la-carte rental plan follows an abandoned bid to create a subscription TV service, said two of the people.

Apple TV was introduced in 2007 as an Internet-connected device that let people view content purchased from the iTunes store, as well as material such as videos from YouTube or pictures on Flickr.

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