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The agreement would allow consumers to rent new Fox films by downloading them from Apple's iTunes digital media store for a limited period, according to a person familiar with the situation.
A digital file protected by FairPlay will be included in new Fox DVD releases, enabling a film to be transferred or "ripped" from the disc to a computer and video iPod.
The launch of iPod-ready films on DVD would "help Apple sell a load more video iPods", said one studio executive.
