Wal-Mart Threatened by iTunes Movies? [Updated]

The New York Post reports that Wal-Mart is warning Hollywood studios against partnering with Apple's iTunes Store for movie distribution.

According to studio executives, "Wal-Mart has overtly threatened to retaliate if [studios] go into business with Apple."

While Apple has only signed one movie studio (Disney) to the iTunes store, the early success has caught the attention of other studios. One executive is quoted as saying "We all want to be in the Apple business".

The threat of Wal-Mart repurcussions, however, may temper iTunes partnerships as Wal-Mart controls a large portion of the retail market for DVDs.

The situation between [Wal-Mart] and Hollywood has gotten so heated and so high-level that Jobs recently phoned Wal-Mart CEO Lee Scott to ask him to moderate his stance, according to a source.

Update: This Reuters story claims that Wal-Mart has said it is not trying to dissuade movie studios from working with Apple's iTunes service.

"The Post story appears to be a rehashing of the misinformation that's been printed previously," a Wal-Mart spokeswoman said in a statement.