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The US retail giant and Asda-owner described the report in the New York Post, as 'a rehashing of misinformation', possibly referring to a BusinessWeek article last month which suggested that Wal-Mart was attempting to dissuade studios.

'Customers want to watch movies and they want to be able to make the choice when and how they want to view them,' the Wal-Mart spokeswoman said. 'While we recognise there are various current and potential providers of this service, we are not dissuading studios from conducting business with other providers.'

The New York Post had claimed

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that studio executives said that Wal-Mart had 'overtly threatened to retaliate' if the studios signed up with Apple. So far only Disney is making its movies available, with sales that suggest it will not be long before the rest of Hollywood joins it.

According to the Post, Wal-Mart has previously expressed its unhappiness with Disney selling TV shows through iTunes by returning 'cases and cases' of DVDs.

The dilemma for the studios is that as much as they want a slice of the ever larger digital cake, Wal-Mart is their biggest customer and likely to remain so for the foreseeable future. That gives the retailer considerable clout, enough to worry Apple CEO Steve Jobs, who, the Post said, telephoned his opposite number at Wal-Mart, asking him to moderate his position.

In all likelihood, Wal-Mart is hoping that Hollywood will respond to its threats by cutting the wholesale price that the retailer pays for DVDs, currently said to be around $3.50 more than it charges Apple for the digital version.

It remains to be seen what impact digital content will have on physical sales; Apple has been selling music for several years without any discernible effect on CD sales while Disney CEO Robert Iger said last week that the company's DVD sales had not been affected by digital competition.