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One other tidbit to note, Apple specifically does not allow one to distribute video or audio content or media direct through the app store. Essentially they don't want the app store competing with iTunes media sales. However, streaming apps are just fine, even if the app is designed to only stream one single piece of media -- as this one currently does. Or if there are interactive elements or other aspects of the media that warrant app store distribution. Such as distributing a short film with multiple endings that the the viewer can choose, I guess.
I would think distributing through iTunes media would be far more desirable and would reach a larger audience. Was this considered at all? For the above-mentioned project I'm working on, the reason why the client is shying away from iTunes media distribution in favor of approaching it through the app store is because Apple still has a total strangle-hold on who can publish through iTunes. Of the approved publishers that we have found so far, who would be willing to publish this to iTunes, they all want way too much of the proceeds... But I think many are being stand-offish at this point because we're not much past storyboards and concept art right now. We shoot in October.