It has been confirmed that Target is pulling UMDs from their shelves. In related news, sony will be selling a distro pack with a memory stick and four unlockable movies (although you only get to unlock one). The movies are: Hitch, SWAT, The Grudge, and XXX: State of the Union.
I really thing if they want people to watch movies on this thing, cheap digital distribution is the only way for them to go, but I doubt this package will be cheap, and the movie selection isn’t exactly impressive. Maybe if they’d just unlock full resolution for movies you rip yourself we could all be happy. Archive.org has some great 3 stooges episodes if you want to try your hand at messing with PSP Video 9.
[url=http://www.kotaku.com/gaming/rumor/rumor-confirmed-target-pulls-umds-from-stores-186817.php]Rumor Confirmed: Target Pulls UMDs From Stores[/url]
[url=http://www.kotaku.com/gaming/psp/sony-explores-psp-movie-distro-via-memory-card-186915.php]Sony Explores PSP Movie Distro Via Memory Card[/url]
(both via Kotaku)