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Well, I guess that is the next step, isn’t it?

Music Videos May Be Coming to iPods
NEW YORK – An iPod with video? Apple Computer Inc. has been talking to several major recording companies, looking to license the sale of music videos through the popular iTunes music site, The Wall Street Journal reported in Monday’s editions.
Negotiations are an indication that Apple is moving to release a device that plays video files, possibly by September, The Journal said. Analysts see the development as likely because of Apple’s strength in video software, including the Quicktime movie format and video-editing software, such as Final Cut Pro and iMovie.
An Apple spokeswoman declined to comment.
The Journal notes that so far, commercial movie download services have not met with much success, nor have devices already on the market allowing users to transfer video files from their PCs.