Yesterday I posted my comments surrounding the huge potential of distributing niche programming via iTunes.

After I made my comments, I instantly looked toward my PSP. Now here is a device, supported by a giant electronics manufacturer, that can do everything the iPod Video can, with some advantages. First, it has the ability to display higher quality video. It can play PS2-quality games. It has the support of a very successful proprietary video format, UMD. And the amount of storage it can hold can be upgraded. Right now, it looks like the maximum size memory card is 2GB, but as personal budgets can allow, storage can be spread across an infinite number of memory cards and storage devices.

It is as sleek and sexy as the iPod, albeit a little larger, but still portable. It can play MP3s and, obviously, videos from a memory card. Its battery life is just as long when watching video (slightly longer if streaming from the memory card).

But there are two glaring discrepancies which make the PSP inferior to the iPod Video: video conversion and distribution.

Anyone who owns a PSP would know, converting video for playback is a royal pain. There are a couple free applications which convert video, such as 3GP and the user-friendly PSP Video 9, but as these are homegrown applications and not supported by Sony, they still have a few framerate and resolution issues. Video playback is a bit of a secret, since some of the higher resolutions aren’t supported for converted video, and to create the highest quality video using these maximum resolution rates can get pretty complex and confusing. It would be nice if Sony provided a free tool (they have a tool for purchase at $20, which doesn’t even come close to offering the same functionality as the two free products mentioned above) that made video conversion simple and offered all available parameters for maximum quality and performance.

From a distribution standpoint, Sony has attempted to offer video downloads specifically for the PSP – in Japan. The site, P-TV.jp, offers free and subscription-based video downloads of movies, music video, television programming and trailers. Given the complexity of converting a video, this may be a more welcomed approach. The problem is, it’s not offered for PSP owners in the US. And it’s all in Japanese, which doesn’t do most of us stateside any good. Granted, the PSP isn’t a video player; it’s main function is for playing games, but looking at the latest figures for UMD sales, I’d say the majority of PSP owners aren’t just playing games on it. I will guarantee the iPod Video will sell more devices than the PSP for the ability of playing video alone, and it would be wise for Sony to piggyback on this trend. Even as Gamespot has a site dedicated to providing PSP-compatible media, it doesn’t represent all the videos the site produces on a daily basis. Not even close.

Given the above arguments, wouldn’t videocasting niche programming, such as gaming, make sense in the hands of a gamer? Sony’s almost there, and with just a few small improvements they could be in the process of making something with a very big impact.