Video On Demand is in fact cheaper than buying packaged media because there are no manufacturing costs tied to the sale of the media (like VHS, DVD etc) you are just buying the movie or TV show you want and getting the content not a manufactured product containing the content.

With zero manufacturing costs the content can be sold cheaper — WalMart Video Downloads won’t make their downloads cheaper because they still want to protect their DVD sales but support video on demand as an alternative source of revenue and keep customers at least somewhat happy it won’t take off though unless they come up with a product like Apple TV for bringing Internet video content to the television.

iTunes sells video content cheaper than the traditional price of most DVDs — but the quality of iTunes videos are slightly lower than DVD quality — also the fair use in VHS and DVD is not available in video on demand services.

There are pros and cons for everything — for me I still think buying the DVD is better — unless you plan to buy video on a service like iTunes and transfer to a portable device like iPod and maybe get a product like Apple TV I think DVD is still better despite a few disadvantages you still get fair use. Sure it might cost a little more — but you know iTunes videos are more expensive than they would like you think despite no manufacturing costs their is the cost of DRM or copy protection.

So choose wisely — if you want video on demand downloads that is fine and all but when you buy the DVD you can extract or rip the video to your hard drive, make a copy for your iPod, convert it to Apple TV even but iTunes bought video you can only play on up to 5 computers at a time, play only on iPods or on your television using Apple TV whether running Mac or Windows — your still locked into a proprietary format.

You can already upload to iTunes your own video content for others to download and watch for free from the iTunes music store: video podcasts.

“Podcasts” (audio) is listed as playable content on Apple TV. Hopefully all the free “video” podcast content currently posted at iTunes music store will be able to play downloaded from the iTunes store as well…

Were you aware of video podcasts at iTunes or did you mean something else when you wrote “Apple will be forced, at some point, to allow users to upload their own content to iTunes”?

Thanks

Assuming you mean “format” (a protocol is a communications method, not a file type), the format of iTunes is not Fairplay. Fairplay is the optional DRM layer that is added to AAC song or h.264 video purchased at the iTunes store. H.264 and AAC are industry standard open formats controlled by the MPEG group. They are just two of the formats iTunes uses, but the only two the store sells.

Video content does not (repeat: does not) require Fairplay to be playable on AppleTV. It does, however have to be in H.264 standard MPEG-4 format. Likewise, audio does not have to be in AAC format, nor does it have to come from the iTunes store.

In simpler terms: If it plays on your video iPod, chances are it plays on AppleTV, whether you bought it from Apple, ripped it yourself, or downloaded it from online.

Resolution sizes are pretty much the only difference.

Thanks for the comment; I realize (as a mac user) that you can load content not purchased through iTunes into iTunes. However, for viewing on Apple TV, the content must be compliant with the protocol of iTunes (i.e. fairplay), for it to be streamable to Apple TV. If you know otherwise, please let me know; this is fairly new technology and from what I know of it, such is the case.

Furthermore, in regard to viewing iTunes content in other players, I was not accounting for the type of “workaround” of an illegal nature that you refer to. I’m sure there is someone who has developed software to circumvent fairplay; however, in reference to Apple TV, I think it is fairly irrelevant to discuss the possibility of some 3rd party program that could crack Fairplay.

You can already “upload your own content” and “view it in other programs”. Nothing is preventing a 3rd party from creating a program that will play FairPlay content using Quick Time library!