Amazon.com Inc. is holding talks with three Hollywood studios about starting a service to allow consumers to download movies and television shows and copy them onto DVDs, the New York Times reported on Friday.

Amazon is in advanced negotiations with Paramount Pictures, Universal Studios and Warner Bros, the Times said, citing people briefed on the discussions. Warner Brothers is part of Time Warner Inc., Universal Studios is owned by General Electric Co.’s NBC Universal and Paramount is part of Viacom Inc.

If negotiations are successful, the fee-based service could position itself alongside rivals such as Apple Computer Inc.’s popular iTunes digital download store.

Depending on the pricing of downloaded movies and the agreed split between the studios and Amazon, electronically selling DVD’s to consumers could represent a way to increase profit margins, as the overall growth of DVD’s has cooled.

In February. Amazon was reported to be in talks with four major music labels on starting a digital music service. Amazon is also working on a digital download service for music and an Amazon-branded portable MP3 player to compete with Apple’s iPod.