Apple is to start selling feature films through its iTunes media store by mid-September, according to a report in Business Week citing anonymous sources.
Movie downloads are expected to cost $14.99 for new releases and $9.99 for older films. Business Week claims that Apple will pay $14 to the movie studio for each download.
Disney is a likely launch partner. Apple chief executive Steve Jobs is the largest single shareholder in Disney, and holds a position on the company's board after the entertainment giant acquired his Pixar animation studio last year.
Apple currently sells video downloads of several television shows at $1.99 per download.
The company is facing competition from services like Google Video and AOL Video, where viewers can watch archived television shows free of charge.
The launch of Apple's movie download service is said to coincide with new iPod models featuring widescreens that offer a better viewing experience than current video iPods.
Apple has not commented on its movie download plans. The company has scheduled a launch event on 12 September in San Francisco.
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