Amazon.com Inc. is working on a new subscription service that would deliver TV shows and movies over the Internet, ramping up the battle among Web companies to control entertainment in the living room. 
 
 The Internet retailer has in recent weeks pitched a Web-based subscription service to several major media companies, including General Electric Co.'s NBC Universal, Time Warner Inc., News Corp. and Viacom Inc., among others, according to people with knowledge of the proposal. 
 
 Associated Press Amazon.com CEO and founder Jeff Bezos 
 
 Amazon's subscription push is a challenge to rivals such as Netflix Inc. and Google Inc. as they race to dominate digital delivery of TV shows and films, encroaching on turf traditionally controlled by cable- and satellite-television providers. 
 
 Apple Inc. is also pushing more deeply into TV, and plans to announce 99-cent rentals of television shows through its iTunes store from News Corp.'s Fox and Walt Disney Co.'s ABC as early as Wednesday, according to people familiar with the matter. 
 
 Apple wants to offer rentals of new shows, available after they air, these people said. Apple is also working on a new device that streams Internet video directly to television sets, according to one person with knowledge of the matter. 
 
 Amazon appears to be targeting a similar model to Netflix, focusing on older, "catalogue" content, according to people briefed on the meetings. Executives at media companies often view the availability of older content on the Web as less of a threat to their existing business. 
 
 Amazon's new subscription service would be viewable on a Web browser, or through devices such as Internet-connected TVs, Blu-ray players and Microsoft Corp.'s Xbox 360 videogame console. Amazon currently sells individual episodes of TV shows on those devices, often for $1.99 apiece. It also sells and rents digital movie downloads. 
 
 The Battle for the Living Room Enlarge Image Close Alamy Amazon.com: Sells on-demand videos playable on set-top boxes and TVs; wants to offer unlimited viewing of older TV shows and movies for subscribers. 
 
 Netflix: Online streaming service lets subscribers play older TV shows and movies on media players and game consoles. 
 
 Apple: Apple TV box currently plays videos purchased with iTunes on a TV set; wants to offer 99-cent rentals of new TV shows. 
 
 Google: Google TV software seeks to merge TV and Web programming on TVs using various hardware. 
 
 Hulu: A paid subscription service will offer new episodes of many TV shows on Internet-connected TVs and other devices. 
 
 Media companies have been reluctant to put too much of their best content on the Internet for too little money. None want to be left behind as the Web merges with television. But they are also wary of encouraging a shift to Web-based viewing, which could lead consumers to cut off cable and satellite subscriptions. 
 
 For instance, Hulu LLC, owned by three media companies including Wall Street Journal parent News Corp., announced in June that it would make its Internet versions of new TV shows available on TVs and other devices—but only for subscribers who pay $10 a month. 
 
 Media companies will pull in more than $30 billion in 2010 from their cut of monthly TV bills, according to estimates from SNL Kagan. 
 
 Amazon has said it would like to launch its new service in time for the holiday season, one person with knowledge of the proposal said. 
 
 Executives for two media companies described Amazon deals as possibilities. 
 
 But it is possible the subscription service could be delayed or shelved if not enough companies sign on, these people and others said. 
 
 An Amazon spokesman said he couldn't "speculate about the future." Spokespeople for NBC Universal, News Corp., Viacom and Time Warner declined to comment. 
 
 Amazon could face an uphill battle matching Netflix. Some people familiar with the matter said Amazon executives had initially balked at what it would cost to license movies at rates paid by Netflix. The DVD-by-mail pioneer has been increasing its spending to secure programming for its Web-based service. 
 
 Netflix recently committed about $200 million a year for movies on cable channel Epix, according to people with knowledge of the deal. Epix is owned by three Hollywood studios. 
 
 Netflix has found a growing niche with online streaming. More than 61% of its 15 million subscribers watched for at least 15 minutes in the second quarter, up from 37% a year earlier, the company said in July. 
 
 Amazon, which began as an online retailer of physical media such as books and DVDs, is trying to shift those businesses to digital to keep up with shifting consumer habits. It has had most success with digital books, where its Kindle e-book reader helped to create a market for e-books by making it easy to buy and read them away from a computer. 
 
 Amazon brings some advantages to the television fight. In at least one version of its proposal, subscriptions could be bundled for no additional charge with its existing Amazon Prime service—immediately giving the service millions of built-in subscribers. Prime offers members cheaper shipping rates for many products in exchange for $79 a year. 
 
 Amazon's existing video-purchase and rental service, meanwhile, is already built into scores of devices. And the company's role as a major retailer of physical DVDs also could give it leverage to wrangle digital-licensing deals. 
 
 —Ethan Smith contributed to this article. 
 
 Write to Sam Schechner at sam.schechner@wsj.com and Geoffrey A. Fowler at geoffrey.fowler@wsj.com ||||| Apple Inc., preparing to announce a new set-top box that delivers video to consumers’ TVs, will include programming from Netflix Inc., according to three people with knowledge of the plans. 
 
 The streaming service would be available on the revamped version of Apple TV, due to be introduced tomorrow in San Francisco, said two of the people, who asked not to be identified because the plans haven’t been made public. Users would pay a subscription fee to Netflix for the service, the people said. 
 
 Programming from Netflix may enhance the appeal of a product that has been called a “hobby” by Apple executives and hasn’t resonated widely with consumers. The Cupertino, California-based company is due to release a $99 version of Apple TV, $130 less than the current model, people familiar with the plans said last week. 
 
 Netflix, which distributes TV shows and movies by mail and online to subscribers starting at $8.99 a month, has provided a free downloadable application to users of Apple’s Macintosh and iPad computers. On Aug. 26, it released new apps that let subscribers stream shows to the iPhone and iPod Touch. 
 
 Netflix, based in Los Gatos, California, rose 2 percent in extended trading. It had gained $2.42 to $125.52 by 4 p.m. in Nasdaq Stock Market trading. Apple gained 60 cents to $243.10. 
 
 Apple, at tomorrow’s annual event devoted to music and media, will also introduce a revamped iTunes site and an upgraded iPod Touch that boasts a higher resolution screen, people said last week. 
 
 Netflix Adds Movies 
 
 Netflix, whose movie streaming service is available via TiVo Inc. players, video-game players and other Internet- connected devices, this month reached a deal to add movies and TV shows from the new pay-television channel Epix, starting Sept. 1. 
 
 Chief Executive Officer Reed Hastings will pay $900 million over five years for online rights to films from Viacom Inc.’s Paramount Pictures, Lions Gate Entertainment Corp. and Metro- Goldwyn-Mayer Inc. That made available more than 3,000 titles from the three studios. 
 
 More than 61 percent of Netflix’s 15 million subscribers streamed movies and TV shows, the company said last month. 
 
 The company also streams films and TV shows from Liberty Media Corp.’s Starz pay-channel service, and select TV programs from CBS Corp.’s Showtime channel. 
 
 Time Warner Inc.’s HBO, which airs shows like “True Blood” and “Entourage,” has said it won’t provide its TV shows to Netflix. HBO also controls the online rights to movies from Warner Bros., Twentieth Century Fox and Universal Pictures. 
 
 To contact the reporters on this story: Ronald Grover in Los Angeles at rgrover5@bloomberg.net; Peter Burrows in San Francisco at pburrows@bloomberg.net.
– Amazon and Apple are both planning major pushes into the online TV business, insiders say. Apple will announce today a new set-top box that will deliver TV to consumers and include movies from Netflix, reports Bloomberg. Apple will offer 99-cent rentals of TV shows through its revamped, $99 version of AppleTV, the sources say. Amazon is also working on an Internet-based TV subscription service that it aims to have up and running before Christmas, sources tell the Wall Street Journal. The company has been in talks with media firms including Viacom, News Corp, NBC Universal, and Time Warner over plans to offer TV shows for rental soon after they air, the insiders say.