Apple and Disney herald new media era

Walt Disney and Apple Computer are to sell episodes of Desperate Housewives and other television shows over an iPod device capable of playing video.

The companies made the announcement on Wednesday at an unveiling of the video iPod in Silicon Valley. The device, to go on sale next week, features a 2½in colour screen and can hold up to 150 hours of video as well as music and photos.

The agreement marks a potential milestone in the migration of traditional media to digital distribution devices such as the iPod. It is a development that could further challenge the traditional model of broadcast television and allow consumers to view television, films and other content when and where they choose.

It also represents the first bold move by Robert Iger since he took over as chief executive of Disney on October 1, and demonstrates his vision of using technology to increase sales of the company's prized television and film content. “For the first time ever, prime-time shows can be purchased online the day after they appear on TV,” he said.

Media companies have envisaged a shift towards selling movies, television and other content online in the same way they sell music through iTunes and other digital stores.

However, they have trodden cautiously because of concerns about piracy and cannibalising revenue from other streams, such as DVDs or the television syndication market. There is also the complication of negotiating new digital rights among producers and distributors.

For Apple the launch of the video iPods is expected to give iPod sales a further fillip and consolidate Apple's position as the leader in the market for portable digital content players.

The video players, slightly thinner than music iPods, will come in a 30Gb (gigabyte) and 60Gb model, priced at $299 and $399, respectively. They will be available in black and the iPod's traditional white.

The iTunes store, which will sell music videos for $1.99, has a library of 2,000 offerings, including animated short films from Steve Jobs's other company, Pixar.

Apple has sold more than 28m iPods since their introduction in October 2001 and now has about 75 per cent of the market for digital music players. The success of the hard-drive-based iPod and other digital music devices, including the pencil-sized Nano launched last month, has helped underpin Apple's financial rebound highlighted by the company's strong fourth-quarter results earlier this week.

Apple has continued to improve and refresh the iPod line-up many times since its introduction.