Apple and Fox plan movie rental deal: reports

"I don't think that will cannibalize rental for the purpose of viewing at home," Pachter said. "I think that the primary purpose of renting movies is to consume the entertainment in the home. The primary purpose of downloading anything from iTunes stores is to consume on the go."

Pachter said the rental terms and movie release schedule will largely determine how successful the Apple-Fox deal is.

Representatives for Netflix and Blockbuster had no immediate comment on the matter.

Video sales have lagged behind the growth in popularity of music downloads on iTunes. Media companies have wanted more flexibility from Apple in pricing policies.

Shares of Netflix ended down 4.4 percent, or $1.25, at $27.45 on Nasdaq. Shares of Blockbuster slid 6.7 percent, or 28 cents, to $3.90 on the New York Stock Exchange.

Reuters