The iTunes Festival app is pretty impressive, and more importantly, the infrastructure for delivering the video is very solid. Apple has a history of testing future technologies in public, disguised just enough to hide their true purpose. For example, those little click-wheel iPod games were used to test technologies that are crucial to iOS and the App Store: purchasing, downloading, installing, and updating software on a portable device.
So perhaps Apple is using the iTunes Festival app to exercise and demonstrate Apple's video delivery technologies. For, yes, you guessed it, Apple's eventual television solution. Live streamed video, on-demand recorded video, millions of simultaneous connections, all proof-of-concept that Apple's television solution works. Ready and waiting for the right time to disrupt the television industry. Just a thought.