The California tech giant is looking to take on Hulu and Netflix with the service, and reportedly has content deals in the works that will allow iTunes users to rent TV shows for 99 cents, reported Bloomberg.
The new Apple TV will be called "iTV" and feature an app store that will allow users to download specific shows and channels. Apple TV was originally launched three years ago to allow users to buy or rent movies and TV shows which are streamed to their televisions through a web-connected box atop them.
The new set top may sell for as little as $99, compared to the current price of $230. The video output on the new device would be 720p, not the "full" high def of 1080p.
"The content deals would give Apple users access to some of the most-watched shows on TV," Bloomberg reported.
“This is a smart move by everyone,” David Bank, an analyst at RBC Capital Markets in New York, told Bloomberg. “Something like this a la carte rental service is an incremental opportunity.”
Episodes would be available for rent within 24 hours of their air dates and will be commercial-free, sources said. Apple plans to hold a San Francisco event Sept. 7, two weeks ahead of the start of the new prime-time TV season, to unveil the service.
According to Bloomberg sources, Apple is currently in content deal talks with Fox, CBS, NBC and Walt Disney.