“In the video space, iTunes is just a temporary flash while consumers wait for better ways to get video. They’re already coming,” said Forrester Research analyst James McQuivey, the author of the study, who also called the paid download video market a “dead end.”

TV Show DVD’s – Who would buy that when they can watch it for free?

DVD’s – Who’s going to pay again for the same movies they bought on VHS?

Videotape – Who’s going to want to pay for a movie they’ve already seen?

Cable Movie Channels – Who’s going to pay extra to see movies?

Cable TV – Who’s going to pay for TV, it’s free!

Movie Theaters 1960 – With TV being free, who’s going to pay to watch in a theater?

TV 1954 – Who’s going to sit in front of a tiny tube when you have a huge theater screen?

Or a little closer to home in the 21st century?

Mp3’s – Who would pay for a 128kpbs track when it’s illegally free or people can buy a CD?

iPod Video – Who would buy and watch TV on that small a screen?

I guess Forrester Research analyst James McQuivey doesn’t remember or care to remember what “leading minds” thought of these newfangled devices back in the day … but he’ll pick right up where they left off in closing his mind?

Of course, iPod Video or the iTunes store may not dominate video download sales as it does music but are you really saying iTunes video has absolutely no chance of all – ever? That the iTunes Video store will make so little in 2-3 years that Apple should just shut down that portion now?

That makes no sense at all from all perspectives.

First, people will always be willing to pay for content when it is MORE CONVENIENT at the right price (and let’s just concentrate on the legal portion of this equation because it would be too easy to talk about the illegal).

You don’t have to go far to see the massive market created by home video – a market that was dismissed as only cinemaphile freaks would collect movies but it turns out that virtually everyone in the United States and most in the world that could afford it preferred to own a movie they could watch whenever they wanted to – same with music.

Or the growth of legal online music from a few million tracks to BILLIONS thanks to Apple. Why, because buying from iTunes was much more CONVENIENT (and a reasonable price) than buying a CD and converting a few tracks. Sure, the fidelity was a little lower but it was clearly an acceptable tradeoff. This simply repeats itself with video. And if you’re talking about convenience at a reasonable, are you not talking APPLE & Apple’s iPod?

After 6 years, no other device can buy, sync & load: music, music videos, movie trailers, movies, photos, podcasts, and audible books with ONE CLICK.

And no other company would dare try the BUY THE REST OF THE ALBUM/CD FEATURE since no one has thought to organize their online store so well. There are still online store that is missing a BUY ALBUM feature, you have to click on EACH track to buy.

And because of the example that Apple set with iTunes music, the video market sellers and distributors are realizing they have their transaction easier but it is still very disorganized with a slew of incompatible formats. Sure, there are dozens of places where you can watch TV shows for free online with ads but they are all over the board and will continue to be so because of corporate alliances or in some cases, anti-alliances. Are all your codecs in place? Some stream in Real, some in WMA and some in QT or require downloading an application (like Joost) – look at the situation now when you want to watch TV online right now – when you click on VIEW and you get presented with the WMA 300, WMA 600, Real 300, Real 600 and then DSL or Cable Modem – what percentage of people’s eyes glaze over? 50% 70% 90%?

Are there brave hardy tech people who can wade through that or Bit Torrent Divx files and watch it? Of course but the success iTunes proves that people want convenience at the right price. 75% of iTunes track purchasers don’t even care about the DRM because they’re not going to move it anywhere else – all they know is that if their iPod is plugged in and they click BUY, it’s on their iPod in less than 45 seconds – that’s ALL they need to know.

Apple has already delivered in AppleTV to transition the PC/Mac owners to stream their shows to a TV. It’s not 100% perfect as you can’t buy from your living room couch but are you going to bet against that feature being added? Apple already has an advantage with the fact they have iPods seeded around the world.

There is good solid competition – the Amazon Unbox & TiVo looks like a solid duo but to get it, you need to buy a Series 2 Tivo DVR plus be a monthly subscriber to TiVo before you can start renting from Amazon. And TiVo while brilliant still has trouble clearing even 6 million users (out of 115 million US households).

The Netflix WATCH NOW seems to work fairly well but it’s also just computer based for now.

And of course, essentially everyone will be offering the same movies & TV shows (and really the mass market mostly wants to watch the Top 100) – like music, pricing & resolution/fidelity will be mostly the same – it will come down to CONVENIENCE.

Will you really bet against Apple delivering the easiest solution?

And while it might surprise Forrester Research analyst James McQuivey – maybe he thinks we’re morons to pay for something when we could watch it for “free” with ads, people will continue to pay for entertainment without ads.

Just like the best selling TV DVD’s are Seinfeld, Friends and Family Guy – shows we can easily see on TV with ads.

Just like we pay for HBO, Showtime & Cinemax.

Just like we buy DVD’s and home video even though we almost certainly bought another earlier version.

Is there a future for ad based streaming, instant-on, video-on-demand? Of course? But at the exclusion of a paid non-ad version? No.

While the iTunes video store may not dominate like the music store, it will thrive.

At some point, there might be a need for an internet IPTV software tuner … will you bet against Apple developing the best looking and easiest one to use also Mr. McQuivey?

In terms of video, the real competition in the next few years will come from cable and satellite delivering on-demand since they are hooked up to 90% of US households already but they are at max capacity especially with HD broadening – beyond that, lots are possible but if we really go 150 MB at a much lower cost or beyond, many things will change – perhaps even AppleTv becoming a front end like TiVo. One thing we know for certain, we shouldn’t count on someone to predict the future who doesn’t even know the past.