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Sep 4 2008 11:54AM EDT

Amazon.com Enters Online Video Fray

Sam Gustin says: The competition is heating up in the streaming video space.

Amazon.com, the giant online retailer, has announced a new ad-free, paid streaming video service that gives consumers access to tens of thousands of movies and television shows over the internet.

The move is a direct play against iTunes, Hulu, and Netlfix, all of which offer streaming services. In a sign of things to come, Amazon.com's service will stream content directly to Sony's Bravia HD televisions, another step in the direction of merged internet and television service.

On the service, called Amazon On Demand, Movies are $2.99 to $3.99 to rent, and $9.99 to $14.99 to own. Most TV shows are $1.99. The service works for both Macs and PC's, although full, non-streaming downloads which are viewable offline only work on the latter, at present.

Internet-based video-on-demand has been making significant inroads lately. The number of American households who use the internet to watch television broadcasts has double since 2006, according to a study released today by the Conference Board and TNS, a market research firm. In particular, the study found that people appreciate the ability to watch programming on their own schedule.

"The shift from appointment TV to content on demand is well underway," said Michael Saxon, senior vice president, brand and communications at TNS, in a statement announcing the study results. "Fundamentally, consumers expect content to be available when they want it, and on the screen of their choice -- TV, PC, or mobile. For consumers, PCs enhance content on demand from simply time-shifting to place-shifting. Online content can be viewed in any room in the house, or at work or school."

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