Rentals needed
Unlike music purchase, movies should have a rent option.
Here are the issues with buying movies:
1) Effective backup - movies need to be backed up to DVDs. Many people might forget to do that.
2) Disk space - Even with backup, many people don't know how to manage their hard drive. It might fill up with movies that they buy.
3) Quality - Currently, all movies support only Dolby Surround (prologic) instead of Dolby Digital 5.1 or DTS
4) Buyers like keep sake box - Movie collectors typically like more physical stuff and special features, etc.
Advantages of renting.
1) It is like pay-per-view instead of subscribing to cable/satellite.
2) Much bigger library to choose from compared to pay-per-view or even video on demand.
3) Order from iTV, store in iTV and watch from iTV. No trip to computer. No computer even needed. Only broadband internet.
4) iTV could have a 40-60 GB HD just for caching and storing rented movies.
5) To make sure rented movies are not pirated, Apple could prevent you from copying the rented movies out of iTV.