iPod touch Did Steve Admit iTunes Movie Sales are bad?

[applerocks]

Steve said in his email to someone else...

No, free, instant gratification and convenience (likely in that order) is what made the downloadable formats take off. And the downloadable movie business is rapidly moving to free (Hulu) or rentals (iTunes) so storing purchased movies or TV shows is not an issue.

I think you may be wrong - we may see a fast broad move to streamed free and rental content at sufficient quality (at least 720p) to win almost everyone over.

Two things strike me here.
1) He doesn't talk about purchased movies from iTunes, only rented ones.
2) He talks a lot about streaming.

Obviously, the latter is coming soon (think Lala), but I do have to question why when talking about the future, he doesn't talk about owning that content. Seems to me like Apple might be gearing up for subscription video content to take on the cable industry. Thoughts?

It's strange that Apple would put Hulu on par with iTunes as one of two valid options. Why not just make iTunes more like Hulu (I'd love that).