AppleSoup hasn't yet inked any deals with content owners, and it seems more likely that the primary content shared through its network would be original creations rather than studio films. The films are encoded so customers who want to view them must provide credit card information before the file is unlocked. The company intends to funnel movies to Internet audiences this way. You and I are pirating intellectual property all the time. Encryption is a joke.
Security is predicated on a trust that parties at two end points have.
As for systems like SightSound's, Kan notes that at least one way of getting around them is to have someone pay for the download and then record it again in a distribution-friendly file format, such as MPEG or DivX. Kan and others familiar with the technology estimate that the film industry has about a year of buildout time before a critical mass of consumers has broadband access, but he says an audience is already in place. I guarantee there are people downloading movies on Gnutella. He adds that all the encryption efforts on the part of the film industry are wasted because they will be decrypted as soon as they reach the Internet.