Obviously the name of Sony's highly-rumored video download service isn't going to be called SonyTube, but it's true that they are going to compete with YouTube, Google Video (which recently bought YouTube), and most definitely Apple's iTunes Store download service. Similar to Apple's service, this download service will be targeted at Sony's own portable device, the PSP. Users will download the movies on their computer, send it to a memory stick which will hold the movie until it's ready to be played back on the PSP. They're also searching for ways to download content directly to the PSP.

Negotiations with Amazon, MovieLink and CinemaNow have been going on lately, in order to provide the content.

Although movie downloads could boost PSP sales, this is just a sad sign that Sony has lost to Nintendo in the portable-console war. I doubt that a launching of such a service will be able to dent Apple's sales in their dominance of this market.

For one, they have hardware advantage. Far more people have iPods than PSPs, and since movies bought from the iTunes store can't play on the PSP, and vice versa, guess what? This goes to Sony's disadvantage, as now they're only selling these to the relatively few people that actually own a PSP.

Secondly, the launch time would be all wrong. The PSP hype is over, not that many people are going to care about it. By selling a new feature for the PSP, although some might buy a PSP for that very reason, it's more likely they're going to go buy a Zune or something. The addition of the iTunes store after the iPod was launched didn't bring in all that many more sales, but it was because the iPod had already taken off. The PSP hasn't.

About Google Video and YouTube: they aren't likely going to be that affected, as they give away mostly free content that people like to watch on their computers. Unless really good free content starts getting posted at Sony's store, they probably aren't going to get many "free" downloads.

And lastly, this is all a format war. People are always watching a video on a device, a format. The war is companies selling different devices that allow you to watch videos. And these videos are often incompatible with the different players, which is what makes it a format war. And you know what they say about a format war: the public always buys which one they think is going to win, regardless of a format's superiority or lack of one. So if Sony wants to be successful with this service, they had better do some massive marketing to convince the rest of the world that PSPs are good for watching videos, just like the Zune and the iPod.