• Financial Times, Thursday, December 27, 2007 11:47 AM

A deal between Apple and News Corp's 20th Century Fox will allow consumers to rent the latest Fox DVD releases by downloading a digital copy from Apple's iTunes platform for a limited time, according to a person familiar with the situation. The agreement, which is likely to be announced at the Macworld show on January 14, has the potential to transform film distribution.

Apart from letting people rent online, Apple will also for the first time extend its FairPlay digital rights management system beyond its own products. A digital file protected by FairPlay will be included in new Fox DVD releases, enabling film content to be transferred or "ripped" from the disc to a computer and video iPod. DVD content can already be moved to an iPod, but this requires special software and is considered piracy by some studios.

Apple, whose shares hit $200 for the first time yesterday in intra-day trade, is understood to have been in talks with Sony Pictures Entertainment, Paramount and Warner Bros about making their new releases available on iTunes to buy and rent.

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