is in talks with three Hollywood studios about starting a service that would allow consumers to download movies and TV shows for a fee and burn them onto DVD's, according to three people briefed on the discussions according to the New York Times.

According the newspaper, Amazon is in talks with Paramount Pictures, Universal Studios and Warner Bros to start a rival to Apple's iTunes store.

If true, the move would send shockwaves through the industry and threaten traditional bricks and mortar stores like HMV and Virgin.

The service is expected to allow users to “Buy, Burn and keep DVD's” and differ from Apple's current policy on its American store by only allowing you to download for viewing on your computer or iPod video.

Industry experts have been quick to point out that the move isn't as far fetched as it may sound on the surface. The once books retailer owns the Internet movie database that gets around 15 millions users a month.

As we've previously reported, Amazon is also working on a digital download service for music and an Amazon-branded portable MP3 player to compete with Apple's market-leading iPod.