Could Apple and Wal-Mart be close to forming an alliance?

In a story from Variety they report that Apple and Wal-Mart are in "discussions" which could produce "an alliance that could allow the giant retailer to profit from iTunes video downloads." It is believed that the 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."

Should this happen it would allow iTunes to carry movies from every major movie studio.

This prospective deal marks a major shift in policy because Wal-Mart "warned Hollywood over the summer that it expects to be a major player in the evolution of the digital marketplace, and that studios mustn't undercut the price of DVDs in its stores with product sold on iTunes."

Thus far iTunes making feature films available hasn't hurt it's presence in retail stores. For example, "Wal-Mart has apparently ordered a healthy 49,000 copies of Pixar's Cars. It will sell Pirates of Caribbean: Dead Man's Chest for $12.99, meaning it will take a hefty loss on each DVD to drive foot traffic in stores."

It is even rumored that all the major studios are getting ready to join Disney in a downloading deal, they just want to wait until the Fourth Quarter of 2006 is over.