I fail to see where Sony offering movies on the sticks circumvents everyone else doing like they've been doing for ages (i.e. downloading it for free, shoving it on the memory stick, and watching it that way anyway), but this doesn't bode well for the survival of the PSP or Sony in general. Tip to interested developers - If it's going to be used for games or movies, call it that, but don't sell it as a swiss army knife if you're not going to deliver one.
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After a lackluster reception and a slew of poor movie choices and even poorer quality, Sony halts UMD development, instead offering free movies to go with buying its memory sticks.