It looks like David Watanabe’s accidental discovery (see my September 12 post) a few months ago was right on the money. Three weeks before Steve Jobs’ annual keynote address at Macworld, someone - perhaps Rupert Murdoch - just stole his thunder. If reports this morning in Financial Times and the Wall Street Journal are true, Apple and News Corp have struck a deal for a new video-on-demand service that could change the way digital movies are distributed, viewed and paid for.

According to this morning’s Wall Street Journal, the two companies signed an agreement that would allow customers to download the latest 20th Century Fox movies through the iTunes store and watch them for a limited time. No pricing details were available, but earlier reports suggested that Fox and Apple were talking about charging $2.99 for 30 days viewing. That’s considerably cheaper than competing services from BlockBuster and NetFlix, neither of which work with iTunes, Macs or iPods.

Disney is the only other studio that makes new releases available on iTunes, but only to buy, not to rent. Paramount, Metro-Goldwyn-Mayer and Lionsgate sell older library titles. But the tide may be turning, and Apple is reported to be in talks with Sony, Paramount and Warner Brothers

In a related move, Fox also plans to release DVDs that use Apple’s digital rights management system, a move that would allow consumers to make legal copies of the disc that could be played on an iPod or other device, such as a computer. The moves were reported by the Web site of the Financial Times ….More

This is good news for everyone. Now, before you X-box and Zune users start chirping how you can do some of this already, recognize that the iTunes Store rules (legal) entertainment downloading and the iPod/iPhone devises are used by more people for mobile entertainment listening/viewing than others. This will ultimately benefit everyone, especially if/when other movie studios climb aboard.