Amazon launches video on demand service

Amazon.com Inc., the world's largest Internet retailer, introduced a Web-based service that will allow customers to instantly watch movies and TV shows on their computer rather than wait for them to download.

A test version of the Video on Demand streaming service, which has more than 40,000 titles, was made available last night to some users, Bill Carr, vice president of digital media, said today in an interview. Customers of Amazon.com's Unbox video service previously had to download films to their computers or TiVo digital video recorder.

Amazon.com, which started as an Internet bookseller, is seeking to expand sales of digital movies and music and lessen its reliance on purchases of novels, CDs and DVDs. Last year the retailer started an online music service, which ranks second behind Apple Inc.'s iTunes, according to market researcher NPD Group. Amazon.com also sells the Kindle electronic reading device.

"We're already one of the largest retailers of DVDs in the world," Carr said. Customers have said they want "the ability to play back, to watch their videos right away."

The streaming service will be fully rolled out at an undisclosed time, Carr said. Netflix Inc. offers a similar service, allowing users to watch 10,000 titles.

Amazon.com rose 15 cents to $71.99 as of 2:30 p.m. New York time in Nasdaq Stock Market trading. Before today, the stock dropped 22 percent this year after more than doubling in 2007.