The iPod has a tiny hard drive that's designed for embedded applications, and a 32 MB (I think it is) RAM buffer cache that's optimized for dealing with song-sized chunks of data. That's about 4 MB. Even a half hour of HD content is gonna be half a gigabyte. There's basically no way for the iPod to play that without constantly keeping the hard drive running, and that will burn out the drive very quickly. Seriously, under constant use, the iPod hard drives' life spans are measured in tens of hours.
Video, whether short-form like TV or long-form like movies, isn't like that. Video is an immersive experience. You sit down and you watch it, and you don't do anything else until it's over. That's a totally different interaction model than music.
So there's basically zero reason for video to be portable. You're not going to carry it around with you. You're going to watch it at home.
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