Amazon's video launch poses no threat to Apple

This past Thursday The New York Times reported that Amazon.com Inc. launched a digital video downloading service Thursday, ending months of speculation that the Internet retailer would be getting into the online TV and movie business. Blogging Stocks Michael Canfield also posted a on Amazon's entry into the movie download biz.

Browsing the web, I came across a piece by Carl Howe of Blackfriars Communications who predicted that Amazon's new service "is sadly enough going to go nowhere." He reasons that "it's not a service designed to meet the needs of real users; instead, it's all about protecting the studios and accepting Microsoft's very limited view of consumer rights in the digital world."

Howe's points about Amazon's service, named Unbox, are well-taken. Firstly, the movie and TV files can be burned to a DVD, but not to any standard DVD player. They only work on the computer that downloaded the file. Secondly, the price to download the file is no less than the price for purchasing the file at retail, e.g., a DVD of "The Matrix" costs $9.88 and when using Unbox or when purchasing it at Amazon.com. Finally, with iPod's domination of the media player market, any new contender will have to spend a gazillion dollars to catch up, even Microsoft's Zune.

Hopefully, on Tuesday September 12th, Steve Jobs will step into his much-anticipated news conference at the Yerba Buena Center for the Arts in San Francisco, and give consumers a movie store that, as Howe puts it, offers "a rich, valuable experience for the consumer, and not just be a way for studios to pocket more money for less work."