For months, there have been claims that Apple is trying to convince movie studios to include iPod-formatted versions of their films along with DVDs—one of several movie-related announcements expected at next week’s Macworld Expo. The idea has struck some as a disappointing cop-out, but it’s been forced upon Apple by U.S. laws that are presumed to permit CD ripping while opposing DVD ripping; consequently, to get a DVD on your iPod today, you need to use third-party tools of varying legality rather than iTunes, and Apple’s only alternatives are to seek permission on a studio by studio basis to let iTunes rip their films, or strike bundling deals like the one proposed above.

Sony’s apparently thinking along the same lines. PC World reports that the company has just demonstrated Blu-Ray Disc to PSP video transfers, enabling PSP owners to have legal, portable versions of the high-definition videos they just purchased. The only problem? You may (well) need a PlayStation 3 as the transferring conduit, and they’re still selling for $400 and up. Even if the feature trickles down to other Blu-Ray Disc players, they’re still expensive, too.

There’s no clear winner of a solution here. DVD ripping still takes a fair bit of time, especially on older machines and/or when using the superior H.264 format, and though companies have done a great job of streamlining ripping options from where they were a few years ago, average people still don’t have a completely foolproof end-to-end program that’s as simple as an Apple application would be. (HandBrake is as close as they come, but for the sake of geeks everywhere still lacks for a single window with nothing more than optimized “good, better, best” options and a start button.) So bundling an iPod-friendly video on an existing optical disc makes some sense: there’s little or no ripping time, the studio gets to approve the quality of the video, and the file can be sort of watermarked.

A more complex compromise would be that DVDs include a hidden file that is, in essence, the pre-ripped video minus some of the FairPlay details—your name, e-mail address, and encrypted iTunes library key, for instance—which would be added when a new version of iTunes detects the DVD and offers to transfer its contents to your library. Your computer and iTunes have a comparatively low-impact workout, the file gets transferred quickly, and it’s a little more protected than the typical DVD rip—it’s solely for viewing on one machine. Everyone wins, sort of.

Still, if that happens, it’s unclear whether the same disc’s contents could be ripped more than once, and if not, how iTunes would track rips. On a related note, how would movie studios deal with DVD rentals—would there be special versions of these DVDs without iPod videos installed, or would the files be time-limited like the proposed iTunes Store video rentals we’ve been hearing about in various industry publications?

Lots to think about there, as well as the possibility that HD discs might be Apple’s target, rather than conventional DVDs—if so, who will it partner with? Sony seems to have the upper hand with Blu-Ray, and has recently made friendly overtures to Apple (the iPod Game Musika and a number of iPod accessories), but also has a desire to bolster sales of the PSP. Then there’s the Toshiba HD-DVD camp, which is now in rough shape, and presently counts leading iPod foe Microsoft as one of its biggest supporters. Next week should bring some answers, as well as a new version of iTunes. Keep watching this space.

Update: TUAW has just run photos from a reader of a Fox Family Guy DVD that apparently requires iTunes 7.6 to transfer a “Fox Digital Copy file” of the video to your iPod. The file comes in Windows Media/PlaysForSure and iPod formats, requires a serial number, and doesn’t work with Zunes or PSPs. There you go.

Jeremy Horwitz

Jeremy Horwitz was the Editor-in-Chief at iLounge. He has written over 5,000 articles and reviews for the website and is one of the most respected members of the Apple media. Horwitz has been following Apple since the release of the original iPod in 2001. He was one of the first reviewers to receive a pre-release unit of the device, and his review helped put iLounge on the map as a go-to source for Apple news.