Sony is planning to unveil a video download service for its PlayStation Portable game device in the first quarter of next year, says the Financial Times.
Customers will be able to download a film to computer and then transfer it once to a PSP. Analysts are already predicting it could threaten Apple's iTunes movie and TV sales.
Rather than storing media on the console itself, movies and downloads will be saved on Memory Stick cards, which will be offered in with up to 4GB of capacity, enough for 10 films.
Amazon.com, Movielink, and CinemaNow are all reported to be in talks with Sony about the service.
The Financial Times article also points out that global revenue from online video sales are predicted to reach $298 million this year, with the market set to explode to $1.5 billion by the end of 2007.
A downloading service from Sony makes sense in light of the fact that Sony Pictures Entertainment is a heavy-hitter in Hollywood, and supplies content for video on demand services.