It’s not surprising that Amazon is now available on the PS3, but it certainly is pleasant. I missed the news, but I found the update when I logged on Wednesday night. It took about ten minutes to download the update and setup the service.

Over at Time, Matt Peckham suggests that this could be a Netflix-killer, depending on what you want to watch and whether you like the Amazon interface, which he calls “leaner [and] higher-tech” than Netflix’s. But I’m not so sure Netflix is the real loser here.

•  Amazon has a catalogue of between 100,000 and 120,000 titles. Netflix probably doesn’t have that many. But that’s just an educated guess because we don’t have figures on the Netflix library, in part because it’s always fluctuating as rights come and go. Still, the size of the catalogue isn’t the best metric for judging these things, because if there’s nothing you want to watch it doesn’t matter how much content there is.
• Amazon’s biggest licensing deal to date has been with Discovery Networks, which has about 3,000 titles on the service. That sounds impressive, but Discovery has always been a volume player when it comes to unscripted shows. The best in breed are shows like Deadliest Catch, but most of the titles are old docs that have been floating around basic cable for years.
• 17,000 titles are available free if you have Amazon Prime. This is actually the number to watch because those titles cost money elsewhere. Amazon Prime costs $79 a year (you get free shipping too!) and now it gives you access to streaming content that’s in demand right now. Some of the titles being kicked around in the coverage of this news are: The Descendants, The Girl with the Dragon Tattoo, and War Horse as well as TV shows like Mad Men, Vampire Diaries, and Justified.
• Right now the Prime offerings seem huge. But for a little more than $6.50 a month, it certainly seems like this Prime deal is a loss-leader to coax early adopters into a long-term love affair with Amazon. So you have to ask how long it will last. And you have to wonder if someone isn’t capable of undercutting Amazon?
• If you don’t have Prime, Amazon’s free streaming library may not be all that competitive with Netflix. Both have a lot of titles, and each has its strengths and weaknesses, but right now it’s not clear that consumers would have enough incentive to cancel Netflix and switch to Amazon. And frankly, Netflix is still cheap, so for the interim a lot of households will probably just use both and take a wait-and-see approach. What they might decide to do, however, is keep both Amazon and Netflix, pay for Internet, and kill cable.
• If you do Prime, there isn’t much incentive to ditch Netflix either. Yes, a lot of the titles that are free on Prime aren’t available on Netflix… but then again they never have been. Netflix has always been in the long-tail business. They don’t so much offer new titles as what theater owners used to call second-run. The service that offers new releases is Apple, and they should be worried about Amazon because, frankly, the bulk price of $79 a year is way better than the ala carte price of $3-5 per title, especially if you’re keen to watch a TV show. Vudu should be worried too. But Vudu is WalMart’s baby, and I don’t see them sitting still in a price war.
• But it isn’t just price that should make Apple worry. Amazon also has a pretty cool offer to watch one episode of a show and then buy the rest. That’s huge! One of the worst things about Apple is that their model forces you to buy something you might not like. With movies, there’s not much you can do there. But TV shows are different. Giving away a little sample (one or even two or three episodes) isn’t crazy because as anyone can tell you, a good TV series is addicting. In fact, I often find myself telling friends that I’d pay more for a season of a show that I love if it meant I could sample the entire marketplace of shows.
• Finally, while Amazon is a well-known name, it’s not a name most people associate with entertainment. Yes, you can buy anything (including videos and books from Amazon) but it’s more like a mall than a video store. That’s not to say that Amazon can’t become a destination for home entertainment. But if it does want to become a home entertainment brand, we’ll need to see some serious marketing, probably a Super Bowl commercial or two.

So how was it? 

I browsed the Amazon library and was pretty blown away by the offerings. The interface is solid, too. However, some people may notice some differences between Amazon and services like Vudu or Hulu… these are little differences like whether your title is available in both HD and SD. They might be a big deal to some users, but they probably aren’t enough to move the masses one way or another. And overall Amazon’s app works and it works well.

Still, we’re not quite there yet when it comes to streaming.

After I cruised through the Amazon library (and thanked my wife for being a Prime member), we decided to download Aziz Ansari’s comedy special. It’s hilarious. And kudos to Aziz for using some really funny copy to walk you through the purchase process (asking you for your email and promising not to be a dick about it is a perfect piece of copy for Aziz).

But here’s where we had a little let down. You buy the special from the comedian’s website. There are two options for payment: PayPal or Amazon. Having just installed the Amazon streaming app, we went with Amazon. Unfortunately, the special didn’t appear on the app. So to stream it to our TV, we had to download the special, put it on our iTunes (thankfully it’s DRM-free), and then stream it over our Apple TV. #MoreComplicatedThanItShouldBeIn2012. But hey, we’re getting there, and it certainly does feel like we’re in the home stretch when it comes to streaming over Internet to your television.