If it worked, it would put a serious dent in Netflix's business.

According to the Financial Times, Apple is in talks with Hollywood Studios about an online movie rental service that could affect on-demand cable and satellite TV operators.

It could also threaten Netflix Watch Now, which lets consumers watch movies on their PC in real time, the moment you want to see it. Netflix only offers about 1,000 of their 70,000+ titles for online viewing, similar to Vongo's own online movie download service.

Plus, similar to Vongo's ability to work on Toshiba Gigabeat portable MP3 players, there's a good chance that Apple movie rentals would play on the iPhone and video-capable iPods. Imagine renting a movie for $2.99, watching it on a five-ounce device or on your living room television (via Apple TV), and then not having to return it. You can do much of this now with Vongo's service, but not many people have Toshiba Gigabeat players. And it's currently not easy enough to go back and forth between a portable and a regular television.

Hollywood studios in video talks with Apple [Financial Times via DownloadSquad]