Why is the PSP not putting up a video fight?

Ugh, it's so irritating when analysts actually have a point. Take this Forrester Research analyst James McQuivey for example. He started seeing everybody downoading video to watch on their iPod (about 50 million TV shows have been sold through iTunes) and started wondering "Hey, doesn't Sony want a piece of this pie?" That was when Sony stopped making out with UMD (always just one "P" from "dump") long enough to insist that he was "cool," but "thanks anyway." Oh, and Betamax was left quietly weeping in her room, sniffling along with "Total Eclipse of the Heart."

We've heard rumors of a PSP video download service before and nothing has come of them, but it seems like the pressure on Sony is continuing to grow. One anonymous studio exec is even quoted as saying that Hollywood is pulling for the PSP, in its own heartless way. "We keep hoping they pull themselves together," she says. "... With the PSP video, we're hoping they create a forward-thinking strategy and stick to it." So, Hollywood wants it, James McQuivey (who managed to be right without time travel, Billy) wants it, but do you want it? Perhaps a better question is, can Sony reposition PSP at this point in its life cycle? Or will the iPod's real fight have to come from PSP2?

[via PSP Fanboy]