Is A Video iPod Coming Soon?

Is a Video iPod coming soon? People have been speculating about a Video iPod for years. And that speculation reached new levels this week amid reports that Apple has been negotiating for the rights to sell downloadable music videos through its iTunes Music Store.

Could these talks be a precursor to the release of a multimedia version of the iPod? Does Apple have a secret Video iPod project in the works even though Apple Chief Executive Steve Jobs has repeatedly denied such rumors?

An article in Monday’s Wall Street Journal cites “unnamed entertainment industry executives” and claims that a Video iPod could be announced as soon as this September.

How Does A Video iPod Fit Into Apple’s Product Line?

Apple already has the portable music player market locked up pretty tight. A move into online video distribution would broaden Apple’s digital entertainment reach and could potentially unlock a new source of revenue for the company.

When Apple first released the iPod, the portable mp3 player market ripe for the picking. It was tiny, fragmented, and lacked a central management software companion like iTunes. The portable video player market is currently in a similar state. Handheld video players from iRiver, Creative Technology, Archos, and Sony sell in such small quantities, market researchers don’t aggressively track their sales yet. Portable video players tend to get lumped in with mp3 and/or DVD players.

Will iTunes Users Pay For Video Content?

If Apple does release a Video iPod, the bigger question is whether or not people will pay $1 (or more) for music videos that are already available for free from the iTunes Music Store. Also, is the small 1.5-inch square iPod screen ideally suited for video? Probably not. A Video iPod will require a larger screen similar to the Sony PSP. Also, video requires much larger storage capacities. Apple will have a difficult time both providing adequate storage and keeping the price point below $500.

Will Apple Get Into The Content Business?

After music videos, what’s next for the “small screen”? Maybe short films, SNL and Conan skits, TV shows, and even original content? Guess we’ll just have to wait and see.