Is Amazon.com, Inc. (NASDAQ: AMZN)'s Unbox video download service worth a look for those wanting to get into video downloads outside of Apple, Inc. (NASDAQ: AAPL)'s iTunes product offerings? Depending on which products you may already have in your home, it very well may be.

Amazon's Unbox video service has been tweaked since I originally looked at it a few months ago, and now the service offers many free TV show downloads for use with your computer or portable media player (like the new Creative Zen), as well as movie and TV show downloads for your TiVo, Inc. (NASDAQ: TIVO) box.

While Amazon's Unbox video player program download doesn't feature all the niceties of Apple's iTunes, I'm not sure it was designed to. The program download, which facilitates content transfer to your PC, is very straightforward and incredibly easy to use. While not featuring music or podcast downloads, the program focuses on video content exclusively (for now). However, that may change soon, with Amazon recently unveiling that it's now offering 2+ million non copy-protected music downloads as well. Perhaps the Unbox player will feature music content soon? That would be my educated guess.

The clever folks over at Bernstein Research have figured out that the new Apple set-top box has a problem. The Apple Inc. (NASDAQ :AAPL) iTune store does not have many movies available for download. The count is a paltry 298 films.

Competitors are well ahead in video content. The Bernstein count is 2,407 for the Amazon.com Inc. (NASDAQ: AMZN) Unbox and Wal-Mart Stores Inc.'s (NYSE: WMT) Walmart.com has 1,037.

The Apple TV product is a sort of place marker between the MAC and iPod, which have been driving revenue at the company for the last five years, and the iPhone, which comes out in June. While AT&T Inc. (NYSE: T) says it has gotten one million calls expressing interest in the iPhone, Apple thinks it can sell 10 million iPhones in the first year after it launches. AT&T is the sole U.S. distributor, so a million calls may not bode well for early sales.

The Apple TV could end up being a bust. Without content, it is hard to see it being a big seller. That could hurt Apple's sales in calendar Q2 2007.

Douglas A. McIntyre is a partner at 24/7 Wall St.

Amazon.com Inc. (NASDAQ:AMZN) is getting a second wind.

Shares of the number one etailer have risen about 12% over the past three months, outperforming rivals including eBay Inc. (NASDAQ:EBAY) Borders Group Inc. (NYSE:BGP) and Barnes & Noble Inc. (NYSE:BKS). Heck, Google Inc. (NASDAQ:GOOG) barely moved during that same period.

Does this mean that investors are suddenly true believers? I don't think so. There is some enthusiasm for Amazon's digital business like the Amazon Unbox video download service. Plus, Amazon had gotten beaten down so badly for so long that investors finally said that enough was enough. Whether their optimism was justified will be apparent February 1 when the company issues quarterly earnings.

The fourth quarter is critical for Amazon and other retailers, since it includes the holiday season, but Wall Street isn't expecting much. Analysts expect the Seattle-based company to earn 21 cents, compared with 47 cents a year earlier, according to Thomson Financial. Revenue is also expected to fall to $3.77 billion, versus $2.78 billion a year earlier.

But most Wall Street analysts don't seem to be beating the drum for Amazon. In fact, they are pretty divided. Seven rate the stock a buy or strong buy, 10 a hold, and 10 a sell. Their media target is $34, below where it currently trades. The worries about Amazon's growth prospects, spending and thin profit margins seem to be as strong as ever.

It seems that the bloom has been off the rose on Amazon.com, Inc.'s (NASDAQ:AMZN) "Unbox" video download service for quite some time -- like, right after it launched. There were many vocal barbs against Amazon's video download service when it debuted, mostly because of the ever-present control the movie studios and everyone else wants to impose on all digital media.

That "locking down of content" will be its downfall if the idea continues. Right now, the studios are still scared to death and hence, we have locked-down content. Customers are rarely free to use the content where they want and how they want.

Amazon's Unbox service -- which I've used (semi-impressed...ok, not that impressed) will be getting some movie studios and TV networks to work with the world's largest online retailer. In what fashion, you may ask?

Well, the content producers will produce made-on-demand DVDs and sell them through Amazon.com's CustomFlix subsidiary. What this means is that if you're looking for a non-mainstream movie or other piece of video content not already in Amazon's library, the retailer will make a DVD for you on request. Actual downloads of the same content should be available via Unbox in early 2007, according to the company.

Sounds like Dell's model of "only building when an order arrives" has now come to the content area. Will it work here?

We've had a few recent posts on Amazon's new Unbox video service from Vince Chan and Matthew Himler. I felt compelled, as an AMZN shareholder, to look into the deep abyss of this new service from blogger community perspective (the in the know crowd almost always) and see how this new service stacked up. Amazon.com is on the, er, hot trail of video on demand over the net, and Mark Cuban has a few thoughts on the subject. He brings basic economic principles into the mix while pondering on a possible Apple competitive annoucement tomorrow, September 12. I waited a few days after the release to get the first impressions from people around the web. Guess what -- they weren't good. It's fitting that the lead movie right now over at Amazon's Unbox service is "V for Vendetta". How wickedly appropriate.

What do bloggers have to say? A lot, and most if downright ugly. Blog entries over at Cnet and Uninnovate are pretty harsh in their treatments of this new Unbox service. Tom Merritt at Cnet, specifically, seems quite mad at the new service, and after listening to a podcast (MP3 link) where he describes the product, I for one can't blame him a bit. He went through a miniature nightmare with Unbox, and it was just released!

What is the deal here? Almost unequivocally, bloggers and journalist testers are furious over Amazon's choice of deployment with the new Unbox service. In a nutshell, here are the service's restrictions:

• Can only be played with a downloadable Amazon.com proprietary video player
• Can only be played on a PC -- no burning of DVDs or transfer to portable video players (PVPs) allowed
• There seems to be some "phoning home" going on with the Amazon.com player, for some purpose (this smacks of adware)
  

With so many limitations on this new service -- undoubtedly from the movie studios who still cannot accept that the entertainment distribution industry has changed -- one wonders why Amazon.com poured so many resources into this project at all. If you're an AMZN investor, was this worth it? Will customers put up with such severe limitation to this product, or do consumers want control over how and where they view content they've purchased?

I hold Amazon shares, and I am quite miffed that the company would put resources into a project with so many shackles from partners that it had hardly any chance of succeeding. That's sunk costs, my friends (my prediction). From such a progressive company like Amazon this just does not sit well with me. I personally cannot see this new Amazon Unbox service doing anything but flopping miserably once consumers discover the limits it has. It's a stark contrast to the rest of Amazon.com, which is just about the best online shopping experience one can have these days. But, Unbox is not in the Amazon tradition, although I doubt they had anything to do with all the limits. We can thank the movie studios for that.