When I read that the new iPod's video capabilities were limited so that you can only use a few formats, I yawned. What did you expect from the company that still only allows two music formats on its media players (their own and MP3)?
When I read that they had ABC-owned shows available for download but not burning to media I raised an eyebrow, and then yawned. I still have never paid for a download -- nor have I downloaded copyrighted songs illegally. I've got 45GB ripped from my own CD's ready for play in the living room on the GoVideo networked DVD player, on a plane on my Cowon iAudio M3, in my bedroom office on my laptop. The only downloads I have are mash-ups, copyright flaunters such as The Evolution Control Committee's Rocked by Rape and the ever-popular Grey Album, and permissible stuff from the Live archive such as those by Mutual Admiration Society. It's clever, and they'll make money off the "We're going to have to watch that again!" diehards of Lost, but I'm not shelling anything out for that.
When I read about the fact that you can't rewind or fast forward, I completely dismissed the device as reasonable for video (my better half is probably getting a Cowon M5 for XMas, but there's months of new products and price drops between now and then), and figured they're not going to pick up any of the video player market share. I put this up there with the level of idiocy that gets people to buy UMD media for their PSPs that they can only watch on a handheld screen.
But here's the catch: would you be willing to watch ads on your pocket video player if, instead of $1.99 for last night's Desperate Housewives, you could get it for $0.25? You have to watch the ads because you can't fast forward.
The link below talks how advertisers are worried that people will pony up $2 the morning after instead of watching through ads. Heck, I don't watch the ads now (see Creating Passionate Users' rant about paying attention to ads) because of TiVo (but I need another one because on average, if there's one good show on, that's when the other good show of the evening runs too), but if you downloaded an ad-laden show from iTunes, you'd have to.
I don't know if they've contracted for any media to be prepared that way, but I can just see it: "Download this 500MB file for $1.99 or Download this 600MB file with ads for $0.25".
Scary. And Halloween's still two weeks away.