iTunes viewed as b'cast threat in U.K.

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LONDON -- Apple's popular iTunes TV download service launched Wednesday in the U.K. with a slate of Viacom and Disney programs that threatens to upset the nascent commercial model of the U.K. broadcasters' own online services.

"iTunes will kill broadcasters' download-to-own stone dead unless they come up with device strategies like a Freeview-plus model that links download-to-own to a TV set or portable devices," Screen Digest analyst Arash Amel said.

Apple's Hollywood studio deals to offer programs such as "Grey's Anatomy" and "Desperate Housewives" for £1.89 ($3.78) per episode through iTunes U.K., will put pressure on the broadcasters' relationship with the studios. The new U.K. iTunes service includes some 28 shows at launch, with some of the shows already being offered by U.K. broadcasters on their own pay-to-download services.

Channel 4, Five and Sky, through its Sky Anytime service, have put a lot of effort into setting up pay-to-download sites alongside their ad-supported catch-up services, which are free. According to Screen Digest, in 2006, download-to-own services in the U.K. generated £277,000 ($558,800), a figure that is forecast to grow to £14.8 million ($29.9 million) this year. By 2011, Screen Digest forecasts that the U.K. download-to-own market will be worth £65 million, of which Apple is predicted to take 80%.

On the new iTunes U.K. service, Viacom will offer shows from its MTV, Paramount Comedy and Nickelodeon channels including "SpongeBob SquarePants," "Laguna Beach" and "South Park."

Disney's U.K. iTunes lineup includes ABC's "Ugly Betty," "Grey's Anatomy" and "Desperate Housewives" as well as the Disney Channel's "Kim Possible" and "Mickey Mouse Clubhouse."

Shows can be viewed on both Macs and PCs as well as fifth-generation iPods, or on a television using the Apple TV set-top box and, in the future, programs will likely also be available on Apple's iPhone, which is expected to launch in Europe this year.
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