Amazon Moves To Pummel Netflix With Instant Video iPad App

Apparently not content with having dismantled the book-publishing industry, Amazon (Nasdaq: AMZN) has ramped up its efforts to assume dominion over the burgeoning world of video streaming.

The gargantuan online retailer on Wednesday released an iPad app that provides video streaming for movies and television shows available through its Instant Video service. The free app lets anyone with an iPad buy and stream movies and TV shows, while Amazon Prime members in the U.S. can watch them for free. It also allows subscribers to download videos they've purchased watch them later. The app's release comes just one day after Hulu made its Hulu Plus content available on Apple TV -- Apple's digital-media receiver.

Amazon's Instant Video service is already offered as an added bonus to subscribers of Amazon Prime, but the iPad app is seen as a major step for Amazon in its attempt to compete directly with Netflix (Nasdaq: NFLX). The latter has been in its own video-streaming war with Hulu, but with 24 million subscribers in the United States alone, Netflix is the market leader in video streaming. If Amazon gets its way, however, that will soon change.

"The immediate access to 120,000 videos may convince more people to sign up for Prime," wrote CNet's Lance Whitney, "even Netflix users like me who can't always find our favorite movies or TV shows available for streaming."

Netflix had long been concerned about the possibility of Amazon splitting off its Prime service into a direct competitor. In January, Netflix CEO Reed Hastings said during the company's fourth-quarter earnings report that he expects Amazon "to continue to offer their video service as a free extra with Prime domestically, but also to brand their video subscription offering as a standalone service at a price less than ours."

Until recently, though, Amazon had been denying such ambitions. In February, Amazon's head of digital video content acquisition, Brad Beale, told Gigacom that no standalone video service was in the works. "The bundle of benefits that come with Amazon Prime make perfect sense to offer to customers," Beale said. "The way that Prime Instant Video is offered today -- we're going to continue that approach at least into the near future."

But Hastings' prediction ultimately proved accurate: Netflix costs $7.99 per month, which comes out to $95.88 per year. Amazon Prime is $79 per year.

Of course, to settle the question of which company has the better streaming service, it's important to first sort how many titles they have in their respective libraries -- a dicey issue when you start crunching the numbers. Although Amazon claims to have a library of 120,000 films and TV shows, not all of those videos are available for streaming. According to some tech sites, the streaming number is closer to 17,000. But if an April report from Fast Company is any indication, even that number may be a gross overestimate. The report found that Amazon counts each episode of each TV show as one video, meaning a show like "24" is counted 192 times. In reality, Fast Company said, Amazon Prime offers 1,745 movies to stream and 150 TV shows. Netflix, meanwhile, does not provide specifics, but according to the report, the service offers about 13,000 videos, about 9,500 of which are movies.

Amazon's new app is free and compatible with any iPad using iOS 4.3 or later. It's up and running now, so consumers should start preparing for a clash of the video-streaming titans.