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We believe the emergence of Divx for digital video discs is very indicative of this trend: with the cost of producing content going up while the cost of massive, writeable optical media goes down, it is simply not cost effective to freely distribute content on cheap media. Content distribution for more expensive material, we expect, will likely follow a Divx like model, where purchasing the media is separate from purchasing the content. The problems we pointed out with Divx earlier--the loss of a user's privacy, for example--are part of the price to be paid for the availability and convenience of cheap, massive storage.

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