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Online retailer, Amazon.com Inc. (AMZN - Analyst Report) has recently extended its Instant Video streaming service to Japan. Through this digital video streaming and download service users can rent, buy or subscribe to a range of video content.

Amazon’sJapan Instant Video service will feature 26,000 movies and TV episodes. The customers will be able to watch older films like ‘Good Will Hunting’ and Michael Jackson's ‘This Is It’ at a rental charge of 100 yen (roughly 98 cents) for 24 hours, with prices increasing with newer hits.

The launch comes on the heels of the introduction of Kindle Fire HDX in Japan. Equipped with a quad-core 2.2 GHz processor and stereo speakers with Dolby Digital Plus-Audio, Kindle Fire HDX boasts 11 hours battery time. The device will come with a 2,000 yen ($20) coupon as part of a promotional offer.

While selling and lending books on the Kindle platform is on the rise, Amazon is signing content deals to upgrade and promote movies and television shows on its video streaming service. Initially, Amazon’s Japan Instant Video service has secured content partnerships with Shochiku, Toho, TV Asahi and Warner Bros, among others.

Amazon’s reach and value proposition are making it a key player in the video distribution business, providing competition to the likes of Netflix (NFLX - Analyst Report). The recent expansion of its video streaming service in Japan will expose Amazon to direct competition from local players such as Hulu, Apple (AAPL - Analyst Report) and Google , which already have a strong presence in the Japanese market. However, Netflix still has no presence in the country.

However, the company’s digital music and video businesses have not had the same success as its e-book market. According to the NPD Group, Amazon and Xbox Video have less than 10% market share, while Apple's iTunes store is the clear leader in digital music with a share of 67% in 2012.

Hence, Amazon is exploring ways to improve its digital business by making music and video available in other countries as well.

Amazon is one of the leading players in an extremely fast-growing market. In the last reported third-quarter, Amazon’s revenues of $17.09 billion were up sequentially as well as from the year-ago quarter. Management attributed the revenue increase to the growing consumption of digital content across different categories owing to the advantageous value proposition Amazon provides to its customers.

Amazon's shares currently retain a Zacks Rank #3 (Hold).

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