Apple is very close to inking a deal with Fox that will see the studios' entire movie output being made available on iTunes. But the deal has only been possible because Apple has compromised over how much it will sell the movies for.

Apple currently sells the entire Disney back catalogue, plus selected MGM, Paramount and Lionsgate films for $15 (£7) and $10 (£5). Apple Insider says Fox is asking for downloads to be priced higher than $15 - something that Apple has refused to do until now.

Richard Greenfield at market analysts Pali Research says the only thing that's holding up the Fox deal are Christmas DVD sales, which Fox obviously doesn't want to dampen.

That could put the announcement on online release of movies like the Star Wars series, Borat and Minority Report as early as Tuesday January 15th - the date of Steve Jobs' keynote address at the Macworld Expo in San Francisco.

Value-added DVDs

The Apple-Fox agreement has been spurred by increased piracy and a desire by studios to sell 'premium priced' DVDs which also include a digital copy of a film that can be watched on devices like iPods. Premium pricing is expected to add $3 (£1.50) to $4 (£2) to the cost of a DVD.

Pali Research's Greenfield also says that once the Fox deal is done, other Hollywood studios will quickly follow suit.

We're hopeful that any announcement in January will also involve territories outside the US. The UK iTunes Store, for example, still only has a paltry selection of movie shorts from Pixar - a company once owned by Apple CEO Steve Jobs. That's simply unfair when you can buy full-length blockbuster movies like Pirates Of The Caribbean: At World's End on the US version.

If Apple does make downloadable movies available here, it's likely to be welcome by culture-starved Brits. 61 per cent of those who took part in a BroadbandChoices.co.uk survey said they'd like to be able downloaded DVD quality movies, according to the BBC.

We'd also expect any digital copy of a movie to be at least Apple TV (720p HD) quality if we're expected to pay a premium for it.