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.

Ok, it's time for some last-minute rumor mongering. A little birdie just flew into TUAW headquarters (a little birdie who wishes to remain anonymous) and told us the following. Remember, this is all rumor, folks, but it sounds like it could be legit to us. Here we go.

"...Let's just say I have been informed by a little reliable birdy about Tomorrow's event. The line-up will follow this similar structure:

• Welcoming of Media Members
• Discussion on iTunes software, iTMS integration into iTunes, and iTMS sales and facts.
• Announcement of iTunes version 7.0
• Announces better search feature for Music Store
• Announces Movie Store. Available Immediately will be movies from Disney and Pixar, among other studios.
• New iPod Nano Announcement (nice brushed casing, while it will have same features as first gen, only a longer battery life)
• New iPod Announcement (Widescreen, Bluetooth, and featuring virtual touchweel. Does not include Wi-Fi, or any other protocols)
• One More Thing....TubePort. A $99 2-piece set that includes a dongle that connects via USB to your mac, and another dongle that connects via included HD cables or regular Component cables to your TV. The movie is accessed on your Mac via an iDisk-like storage component hosted by Apple.
  

Jobs will then explain the pricing structure of the Movie Store. Movies will be available as either a smaller iPod-format (which will cost $9.99 per movie), or as a larger, streamed movie to be streamed to your TV via TubePort. This cost $14.99 per movie. To purchase an iPod-formatted movie and a streamed version of the same movie, it will cost you $19.99."

Do with that what you will (We agree that "TubePort" is a really lame-sounding name).

My theory is Apple is going to continue the smaller announcements throughout the year, if for no other reason than to distract everyone from the impending doom that is Vista. Case in point, the cryptic comment Steve made after this week's announcement: "we'll see you all real soon." AppleInsider now reports on what might be the announcement next time Apple gathers the analysts for another show— the iTunes Movie Store. The evidence is in the form of a screenshot, and details surrounding a survey. The survey is incredibly descriptive, hinting at possible subscription service instead of the buy-and-own model we've all come to love. It would be $9.99 a month for subscription, but $12.95 to buy a movie, according to the survey (and it asks which respondents would prefer). For additional salt in the wound, there appears to be no provision for burning these to DVD. I know most people still trust those plastic discs, and it's partly a cost issue (or perceived cost anyway), but personally I'm happy to keep buying terabytes for pennies and archive onto HD's. Anyone here interested in a subscription model for iTMS at all? Personally, that's what I'm afraid of...