Sony video downloads to challenge iTunes?

Online video sales may take in about a third of a billion dollars this year. Sony wants in on the action. According to today's Financial Times, Sony is making plans to enter the video download market, specifically to provide content for its existing 20 million plus PSP installed base.

Amazon's movie download service, as well as video content providers like MovieLink and CinemaNow have pretty much been resounding failures. So what will Sony do differently? For one, they intend to distribute their movies in a memory-stick friendly form, storing up to 10 feature films on a 4GB stick. For another, they won't require any hardware upgrades to the existing equipment in order to purchase and play movies.

I'm pretty unclear about how they intend to manage their digital rights with this setup. And 10 movies on 4GB sounds over-compressed. A two-hour iTunes movie is about a gigabyte in length. 400MB sounds more like what you'd expect coming out of iSquint or Handbrake. It would, of course, be lovely if their content would play back on the iPod as well as the PSP, but I'm not holding my breath.