Wal-Mart, the world's largest retailer, has held discussions with Hollywood studios about installing kiosks in its stores from which consumers could use digital technology to download films on to portable discs.

The move aims to alleviate the shortage of space on Wal-Mart's shelves, which has been identified by Wall Street analysts and film executives as a cause for the slowdown in DVD sales. At the same time, it would benefit the studios by lowering their shipping costs, and the expense of dealing with returned inventory.