"If you think MGM's back catalog equals low profits, you're crazy."
IP doesn't just guarantee you profits.
Look at MGM's track record themselves.
I'd love to see Sony go down the pay-for-download route and start opening up their catalogue.
However, i think it's more likely that things might get stuck on UMD/BluRay. Saying that, Sony are positioning themselves as a "Broadband company" so perhaps this really is another step towards digital distribution of vast amounts of content? I know they bought out a few european companies who specialise in short documentaries/films (1000's of them) that would be ideal for padding out such a scheme.