Will Apple Kill Blockbuster and NetFlix?

Coming soon to an iPod near you: video rentals.

Apple's on the verge of a deal with 20th Century Fox that would allow customers to rent movies through its iTunes platform.

The new agreement would let customers pay to download a digital copy of new Fox DVD releases that would expire after a set amount of time, according to The Financial Times. The paper reported earlier this year that the video downloads would cost $2.99 and be viewable for 30 days.

News of the deal leaked out just weeks ahead of Apple's Macworld conference, where Apple CEO Steve Jobs often reveals new products and innovations. Officials at both Apple and News Corp. declined to comment.

Apple is hoping video downloads could mirror the success of its music sales, boosting demand for its hardware.

"It's not revolutionary. It's just another reason to buy an iPod. It's more content, and that's really what Apple is trying to do," said Daniel Scalzi, CEO of Matrix Investment Research.

Apple's stock hovered around the $200 mark yesterday after more than doubling in value since the start of the year.

ITunes users can currently buy new Disney movies, as well as some titles from Paramount and Sony. For the most part, however, Hollywood has resisted putting its wares for sale on iTunes, fearing that downloads for $9.99 would undercut DVD prices and dent their own disc sales.

But allowing for rentals could bring many more studios on board, pitting Apple against Blockbuster and Netflix, as well as cable companies, which generate revenue by offering video-on-demand.

As part of the deal, Fox also plans to release DVDs that will be encoded to allow buyers to legally copy movies onto devices such as iPods for use on the go.

This year, Apple added video viewing capabilities to the newest version of its tiny iPod Nano. It also debuted its Apple TV product, which lets users wirelessly stream anything downloaded off of iTunes, including movies and videos, straight to their TV.

Source [NYDailyNews]

The iPod has killed before. It will kill again.