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Amazon.com Inc. (AMZN - Analyst Report) has recently launched an iPad app for its Instant Video streaming service, allowing customers to enjoy films and TV shows on their iPad.

The free app also allows Amazon Prime members to use their membership to watch thousands of videos including TV shows like Glee, Downton Abbey and Fringe, or popular movies such as Mission: Impossible 3 on their iPad at no additional charge.

This marks the second move by Amazon to expand its digital content support to iOS. In June, the company launched an iOS version of Amazon Cloud Player, enabling local and streaming support for Amazon music libraries.

While selling and lending books on the Kindle platform is on the rise, Amazon has been doing well with its video content. The online retailer has been consistently upgrading and promoting movies and television shows on its streaming video service.

The company has extended Prime Instant Video to Microsoft’s (MSFT - Analyst Report) Xbox 360. Customers can now watch Prime Video titles on Kindles, Sony’s (SNE - Snapshot Report) Playstation 3, Apple’s (AAPL - Analyst Report) Mac or other PCs, as well as on TV.

At the same time, titles have expanded to 18,000 movies and TV episodes. 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).

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 has a market share of less than 15 percent, while Apple's iTunes store is the clear leader in digital music, with a share of more than 50%. Netflix is a dominant player in paid digital movie rentals, with a market share of 55% in the fourth quarter of 2011.

Hence, Amazon is exploring ways to improve its digital business by making music and video available on as many gadgets as possible. We believe that if customers could access Amazon’s digital music and videos more easily through Apple's and other devices, the company’s digital media sales would accelerate.

Amazon is one of the leading players in the extremely fast-growing retail ecommerce market. The strong growth prospects are making the market more competitive by the day. At the moment, however, most of Amazon’s competition (whether direct or indirect) continues to come from eBay Inc. (EBAY - Analyst Report), Apple through its iBooks app, Barnes & Noble, Inc. (BKS - Snapshot Report) and Google .

Currently, Amazon has a Zacks #3 Rank, which implies a Hold rating in the near term.

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