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Apple's iTunes to rent out Fox movies

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Apple (NASDAQ: AAPL) logo Apple (NASDAQ: AAPL)'s iTunes just got a new video partner in News Corp (NYSE: NWS)'s Fox movie studio. The deal is the first of its kind, allowing iTunes subscribers to download Fox movies and watch them for a limited period.

According to The Wall Street Journal, "sales of video through Apple's iTunes Store have failed to grow at the same pace as the site's music downloads, analysts say." So, perhaps offering rentals will be a better model than selling content outright.

But the theory makes little sense. Short-term rentals are unlikely to trump sales. Movies sold on iTunes cost as little as $9.99, a visit to the Apple site shows. How much less can a rental be? And what is the incentive for having something that can only be used for a few days?

Nice partnership, but no reason it will increase video revenue at iTunes.

Douglas A. McIntyre is an editor at 247wallst.com.

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Last updated: November 08, 2009: 04:28 PM

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