For some time now, analysts have been predicting that Apple will release a video iPod.  As Think Secret recently reported:

"While a video-capable iPod is in development, without the agreements nor infrastructure in place to deliver movies to customers through a store-like interface, Apple sees little value in releasing such an iPod at this time. Apple insiders have also said executives see consumers needing the capability to easily import the DVD movies they own to a usable format (similar to the encoding functionality provided for audio CDs with iTunes) in order for a video iPod to be truly successful. The complexity to date of accomplishing such a feat has meant only a minority of computer users have dabbled with watching full-length movies on their computer, with most of the, having acquired the content through file sharing services."

While it's certainly true that Apple's inability to secure an "iTunes-like" agreement with video content producers has had a lot to do with their decision not to release a video version of the iPod, that second part (making it possible for customers to import a DVD into it like they can import audio CDs into iTunes and iPods) is where the real stickler comes in.  What does the DMCA have to do with that?  Plenty. Think about it.

The DVD specification includes encryption and Macrovision protection on the video content recorded to the disc.  For Apple to provide customers with a tool that would import a DVD video into a video iPod, they would have to offer a tool that cracks the encryption, removes Macrovision, and converts the video into an "iPod" format.  Such software would run afoul of DMCA provisions that state it is illegal to distribute products that remove content protection or even just to liberate such content from its protection mechanism.  Thus, Apple and its customers would run afoul of the DMCA if a video iPod included a DVD importation capability.

So, at least legally, Apple customers would have nothing to run on a video iPod if it released one today, aside from Creative Commons licensed content on the Internet (where its license would permit that), public domain video, and home video.  That would be like having a current "music" iPod that could only play public domain music and "free" music.  Not a very useful device.  Not likely to sell well UNLESS customers broke the law and loaded it with pirated video content.  So releasing a video iPod would likely put Apple in a very "actionable" position with the MPAA and other video content providers.  They may make some mistakes, but I doubt they're that stupid.

What we have here is a perfect example of how the DMCA stifles innovation.  Apple clearly has the technology to produce a video iPod (according to industry experts).  They probably have the desire to do it.  But if they put the device on the market in the current legal climate, they open themselves and their customers up to lawsuits because of a STUPID law, the DMCA, which only exists to shore up the inadequate controls placed on DVD and CD content.  Pretty sad.