Amazon.com is launching a streaming video service called Amazon Video On Demand to replace its current video download service, Unbox. It's available to select customers today, and will open up more broadly to the public later in the summer.

Here are the main features:   

•While Unbox requires installing proprietary software and waiting for video to download before viewing, the new service will work through the browser and stream content instantly.

•40,000 movies and television programs will be available to rent or buy from most every distributor and studio except ABC/Disney.

•An online storage "vault" will allow you to access and stream your purchases from multiple devices just by logging in.

•Amazon's video store will be accessible on Sony Bravia televisions with the purchase of a $300 internet video link (future Bravias are expected to have this capability embedded).

What do we like?

Purchases being stored remotely will be a unique feature, and very handy given our frequent desire to access content across multiple devices. That iTunes still doesn't have that feature is one of its major drawbacks.

Also, Amazon's library of 40,000 titles is impressively large compared with rivals like Netflix and iTunes.  

But without a doubt the next frontier in video distribution is getting it on your television. On that front, Amazon's new video service is still weak.  

The fact that Amazon's video on demand offerings can be viewed only on a television by owners of Sony Bravia TV sets—and currently, only to those willing to pony up $300 for a special piece of hardware—limits television viewing to a laughably small segment of the market.

Unbox purchases can be viewed on TVs using TiVo hardware, so if that relationship extends to steaming video, Amazon would be able to pick up extra users that way. Amazon says it's planning on pursuing further content delivery deals with other device makers, but still, for the time being we're looking at very limited television viewing capabilities.  

Netflix, meanwhile, offers around 10,000 rental movies for members to stream instantly to their televisions through its $99 Roku box, and soon through Xbox 360 as well.

Apple's iTunes also has a large selection of videos for purchase or rental that can be viewed on a television using Apple's $229 Apple TV device (they are downloaded, not streamed).

For all the content providers scrambling to put together a compelling internet-to-TV offering, time is of the essence. Once a consumer invests in hardware—whether it is the Roku, Apple TV, Bravia internet video link, or some other new gadget—he or she is more or less locked into that one provider because of the high switching costs.

But Jeff Bezos, the chief executive of Amazon, may have an ulterior motive in pushing ahead on a new video service. Brad Stone of the New York Times says, "Establishing a foothold on televisions could be a way to let couch potatoes and television advertisers link up to the rest of Amazon's online store with a click of the remote control."