One word answer would be cannibalization. Rather then see future opportunity and addressing market demand both the Music and Movie industries are more concerned about short term loss.

Rather then see a 7 dollar downloadable sale as growth opportunity they see it at the expense of a 19.99 sale.

The way to handle both music and video is simple, charge only what you need to turn a fair profit then make it simple to use, easy to get what you want and totaly portable. Do that an the market will pay for the service and ilegal copying will be minimized.

Yet, if you make it easier and more convienient to “steal” content then to purchase it, then the result is easy to predict.

The root emotion driving the boneheaded decisions in the entertainment industry is GREED. Neither movies nor music can really be copy protected. Want that movie in a portable format? Run the movie on your PC and run a screen capture video (like camtasia http://www.camtasia.com) program, then render it in flash, mp3, quicktime, etc and done.

That is just one way to get around any copy protection of video. The music industry is still getting beaten by LimeWire, etc. the same fate awaits the movie industry. These guys are failing on purpose because they honestly believe they can hold on to the older modle that has given them marble floors and leather walls in their offices.

Jack