Video on Demand

Posted on July 20, 2008

In a move designed to beat out the local video store and keep people in front of their televisions and computers, Amazon.com has introduced (to a limited number of users to start) a new online store of TV shows and movies, called Amazon Video on Demand. Customers will be able to start watching any of 40,000 movies and television programs immediately after ordering them because they stream, just like programs on a cable video-on-demand service. That is different from most Internet video stores, which require users to download files to their computers.

From the TV side, the video store will be accessible through the Sony Bravia Internet Video link, a $300 tower-shaped device that funnels Web video directly to Sony’s high-def televisions. That is an extra expense, for now. But future Bravias are expected to have this embedded in the television, making it even easier to gain access to the full catalog of past and present TV shows and movies, over the Internet, using a television remote control.Amazon Unbox, the company’s original download store, was a disappointment because it required users to install software to watch the programs they bought. Plus it only worked on Windows PCs and TiVo boxes.

To make the new service more appealing, the first two minutes of all movies and TV shows will begin playing for users on Amazon immediately when they visit a product page on the digital video store.

It will also let users buy a show or movie without downloading the file to the PC. Amazon will store each customer’s selection online. They can then watch that show or movie whenever they return to Amazon, even if it is from a different computer or device, a solution that gets around studio concerns about piracy.

Amazon will have some big rivals if it hopes to dominate the emerging world of digital video. Apple, Microsoft, Google and Netflix are all looking to capture the living room as well.

Amazon Video on Demand is not expected to generate significant profits for Amazon, which must pay large royalties to Hollywood studios and develop the infrastructure to make the service operate reliably.

But Amazon may have another goal in mind, a way to let viewers and television advertisers link to the rest of Amazon’s online store with a click of the remote control.