As part of Amazon’s continued efforts to optimize the customer experience in terms of quality and convenience, Amazon is launching the next iteration of its digital video service with new emphasis on immediacy and seamlessness.  The service will add streaming functionality to the existing paid, a la carte transactional model. This transformation is the result of extensive feedback and ongoing developments in the competitive landscape, both of which have made clear to us the need for an accelerated viewing experience. It is a breakthrough for our service in two ways: 1) customers can watch their content instantly—no application, no large files to manage—it just works; 2) streaming capability makes our service compatible on any PC platform with a Flash-enabled internet browser, immediately expanding our customer base to include Mac and Linux users.  The addition of streaming to the service will be accompanied by a name change to “Amazon Video on Demand,” in part to reflect its renewed dedication to customers with any sort of connected device. To this end, Amazon also will be launching this service on internet-connected Sony Bravia televisions this summer, as the first of many connected-hardware partnerships to come in the next several months.

 It is important to note that, for those customers who enjoy their content on TiVos or while traveling, Amazon will continue to offer the same download service and Unbox application that exist today. Additionally, paid transaction business will remain the same—Amazon is not launching an ad-supported streaming model at this time—and will continue to require customers to login to their Amazon account in order to view their purchased content. With these exciting additions to the service, Amazon expects meaningful growth in the size of its business over the next year—and thus look forward to our continued partnership with you in the digital space.