There are currently more than 4 million TiVo users in the US, who pay a modest monthly rental on multi-year plans to rent the set top boxes. However, the new Amazon Unbox service will only be available to the less than 40% who subscribe to the newer TiVo Series 2 or 3 services.
Microsoft enables users to stream downloaded TV shows and movies from their PCs to their TV sets using the Xbox 360 games console while Apple is set to release a set top box called Apple TV which will similarly enable iTunes downloads to Mac computers to be streamed to the TV.
However, the TiVo and Amazon Unbox service poses a serious threat to the home computer as digital video entertainment unit, requiring no upfront cost and expertise for the computer averse user.
In addition, unlike Apple's iTunes, the most popular online download service for music and increasingly popular for TV and movies, the Amazon Unbox and TiVo service will offer a movie rental plan. Prices for movie and TV show purchases will mirror that of iTunes starting at US$9.99 for movies and US$1.99 for TV episodes, while 24-hour movie rentals are being touted to start at US$1.99.
Amazon has already lined up deals with major TV and movie studios including Warner Bros, Paramount, Universal, CBS and Fox, and is holding talks with others. Even Disney, which has a close relationship with Apple through the Steve Jobs Pixar connection, is reportedly keen to get on board.
The downside of movie downloads is that it can take hours to download a full length movie. However, users can begin watching after a few minutes, while the download is in process. Another problem with the increasing popularity of bandwidth hungry video downloads, which has been recently raised by a number of Internet players is the danger of overloading the Internet with huge quantities of data that it is not equipped to handle yet.