“Apple and Wal-Mart are in discussions over an alliance that could allow the giant retailer to profit from iTunes video downloads, which have been a source of great tension between Hollywood and the retailer in recent months,” Michael Learmonth reports for Variety.

Learmonth reports, “A deal could take the form of a digital download ‘coupon’ that would allow consumers to buy movies, TV shows or music on iTunes with Apple paying the retail giant a percentage of the proceeds, one industry insider said.”

Learmonth reports, “What’s in it for Apple? Since studios (except for Disney, of course) have so far turned a cold shoulder to iTunes because of Wal-Mart’s demands, the computer giant would then gain access to titles from every major. Wal-Mart is one of the nation’s biggest sellers of iPods.”

“Studio sources say the rest of the majors are very close to joining Disney in a deal with Apple but are holding off until the end of the key fourth quarter, when half of all DVD sales occur,” Learmonth reports.

Full article here.

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Wal-Mart: we’re not fighting iTunes Store movie downloads – September 23, 2006
Wal-Mart threatens retaliation against Hollywood studios if they sell movies via Apple’s iTunes – September 22, 2006
Wal-Mart loses ‘philosophical argument’ with Apple CEO Steve Jobs, gains top-selling iPod – November 29, 2005