Amazon has launched its Amazon Video on Demand video streaming service and, according to Dan Frommer from Silicon Alley Insider, “it’s the best competition iTunes has seen yet.”

Amazon Video on Demand delivers streaming video – so the minute you order a given program, the video starts playing instantly.

Amazon Video on Demand offers video rentals for $3 to $4, movie purchases for $10 to $15 and (most) TV episodes for $2 (with season packs also available). Amazon’s entire library consists of 40,000 movies and TV shows.

For the moment, full downloads for offline viewing are only available for Windows PCs and TiVos, not Macs or Apple TVs. Portable movies won’t play on any Apple gadgets such as iPods or iPhones, but the service will stream to some Sony TVs and TiVo devices, as well as Windows Media Center extender devices, such as Microsoft’s Xbox 360.

Source: Dan Frommer, “Amazon Launches Video Streaming Service: Look Out iTunes, Hulu, Netflix”, Silicon Alley Insider, September 4, 2008

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