A new Think Secret rumor suggests iTunes will be doing movie rentals instead of movie sales as has been previously believed and that this will be announced during CEO Steve Jobs keynote at Apple’s Worldwide Developers Conference starting Monday August 7.

Assuming this rumor is true and I seriously have doubts, if the rentals are priced like Movielink, Cinemanow, etc., it’s going to tank. Nobody wants to pay $3-5 per new movie rental online, even through iTunes (which this name continues to sound bizarre for non-music media, when are they going to change it?). Haven’t enough netizens voted with their wallets on pricing? Movielink has been up for sale for awhile and there doesn’t appear to be flocks of interested suitors.

Meanwhile, Hollywood is moving laboriously toward a model that netizens do like with deals like Guba which allow burning movies purchased online to a single DVD. The Cave currently costs $13.99 via Guba, which is still a few dollars more than we saw the DVD at Best Buy on sale for $9.99 + tax. TV series like Babylon 5 Season 1 cost $1.79 per episode via Guba for a total of $41.17 (and each episode must be purchased individually) and this includes no extras/special features (right?) or packaging. Amazon is selling the Babylon 5 - The Complete First Season (affiliate) DVD for $43.93 with all the goodies and packaging. It’s encouraging to see the movie deal online getting closer, but I will continue to bang the drum that the deal online must be priced less to be successful, just like buying music. Collectors and fans want the packaging and cover art.

If this alleged movie rental pricing should be priced more than $1.99 like the TV to videos in iTMS, why pay that much when you can get an unlimited movie rental plan (2 movies at a time) at places like Hollywood Video for $27/month? Even with gas prices and travel factored in, if you rent more than say 12 movies a month (that’s a mere six trips to the movie store) the convenience factor isn’t worth it.

If Apple were to put all movie rentals — new, old, etc — on par with buying iTunes song (99 cents each) then movie rentals via iTunes could be seriously disruptive. I don’t see that happening, though. If this Think Secret movie rental rumor has any legs and again, I doubt it, then they are going to make them too expensive. I think Steve Jobs should keep fighting for $9.99 (or less) pricing for all online movies with an option to burn to DVD like Guba.

Whatever actually happens in the coming days, it’s encouraging to see Hollywood moving a little closer to what online consumers desire.

Hat tip to LUX.ET.UMBRA

• Amazon Unboxed gets into crowded ring handcuffed and is sucker punched by Hollywood pricing
• $16.99 for unlimited streaming from Netflix library of 6,000+ movies
• Creative DVD packaging for Grease and My Name is Earl
• Guba lowers prices on downloadable movies, the iron is getting hotter
• Movielink offers a few new online movies at $15.99, still too expensive
• Checking out Hollywood Video and Gamecrazy