Rumor Battered: Hollywood Poo-Poos on Apple's Movie Rental PlanS

The briefly ballyhooed iTunes movie rental store did sound a bit too good to be true. While multiple sources confirm Apple's feeler, the flipside is that the movie studios aren't exactly smitten, according to Reuters. $2.99 for 30 days? Preposterous, sneers Hollywood. Easy portability to your iPod or iPhone? Poppycock.

Given that the movie download market is still in its relative infancy, Hollywood believes that they don't "need to rush into a deal with Apple." Fools rush in, true—but look at what came of the music industry's reticence to embrace new avenues of distribution.

Moreover, that ever present fear, cannibalization, is also at play, with the studios wringing their hands over the possibility of losing the coin that trickles in from standard PPV. Not to mention that at $2.99, the fee would undercut pretty much everyone else in the game.

What to do, what to do? If Apple wants a rental store, the smart money would point in its favor, though the terms might not be as favorable as we initially heard. On the other hand, smartly leveraging Apple TV (perhaps with a few other tricks up its sleeve) might make the deal too tasty for Hollywood to pass up. What do you guys think?

Hollywood balks at Apple online movie rentals [Yahoo!/Reuters]