iTunes isn’t the only online music and video download service out there and Sony wants to make sure you know it. In fact, the electronics giant is rumored to be prepping an online store of their own, issuing out content catered specifically to the PlayStation Portable (PSP). This strategy, they hope, will do better than their UMD movie business, which hasn’t exactly been the hottest commodity on the block.

Instead of distributing the video content in a format for viewing on a big-screen TV (or even a small-screen laptop), Sony — if rumors are to be trusted — will be dishing out the movies in a PSP-ready format. They’ll shrink the files down so far that you’ll be able to shove 10 feature films on a 4GB Memory Stick Duo (in other words, each movie is 400MB). And as the PSP is already pre-programmed for video viewing, no additional hardware/firmware upgrades will be necessary.

How they’ll handle DRM and how they handle pricing, those are still up in the air. Well, that and the actual existence of a Sony PSP online movie shop.