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According to the Wall Street Journal [subscription required], Target president Gregg Steinhafel has written to the studios asking for the same prices that the online providers pay.

The Wall Street Journal said that Steinhafel's letter warned that Target may reduce the amount of shelf space for DVDs, citing an anonymous studio executive. Target declined to provide a copy of the letter, releasing only a short statement.

'It is Target's position that there should be equity between the alternative means of delivering movies to consumers,' the statement said. 'Target does not object to competition, but we do expect a level playing field upon which to compete with the online services.

Target is one of America's biggest DVD sellers. The

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biggest, Wal-Mart, has also expressed concerns that the digital stores are getting a better deal when it comes to wholesale prices, paying as much as $3.50 less for each movie. Wal-Mart denied claims that it had threatened unspecified retaliation against the studios.

Currently Disney is the only major studio providing content for Apple to sell through iTunes. Target and Wal-Mart's position is amply demonstrated by the differing prices of Disney's The Little Mermaid, which costs $12.99 through iTunes, $14.87 at Wal-Mart and $14.99 at Target.

Disney films accounted for $1 million in sales in the first week they were available through iTunes. It projects that it will make additional revenue of around $50 million in the first year, a figure that is sure to see other studios tying up deals with Apple.

Wal-Mart is thought to be considering various options for its own digital service, including a free download of any movie purchased on DVD or installing kiosks where films can be burnt to a disc. The retailer is also said to have held talks with Apple about the possibility of selling vouchers that can be redeemed through the iTunes Store.