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The upshot of this is that any business models that rely on “selling” copies of previously televised TV shows, such as Apple’s sale of “Lost” and “Desperate Housewives,” is doomed to failure. Why pay for that content when it can be extracted for free. There is a wealth of difference between what Apple is doing as far as the content companies are concerned, because it places the content under the protection of its Fairplay DRM. These other methods leave content unencrypted and in the clear, a potential source for internet piracy.

But from the point of view of the consumer, the free personal copies versus the paid personal copies are going to mean that Apple will sell iPods, but not sell much content. Instead it may have to take on a strategy closer to Sony’s and negotiate for high value film content on iTunes which is not widely available via broadcast, because it is protected by conditional access systems and still in their pay per view video window.

In the meantime Apple and Disney this week said they will expand their iPod content sales partnership to include ESPN, ABC Sports and ABC News, selling programs for $1.99 each from Apple's iTunes store.

Apple already sells programming from Disney’s ABC, including just shown episodes of Desperate Housewives, and Lost.

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Faultline is published by Rethink Research, a London-based publishing and consulting firm. This weekly newsletter is an assessment of the impact of the week's events in the world of digital media. Faultline is where media meets technology. Subscription details here.

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