AOL has stopped selling videos online and instead is throwing its weight behind Amazon's Unbox download service. AOL, which is shifting from paid downloads to ad-supported video plays, will include Unbox-sold videos in video search results. Amazon.com has not had much success with Unbox and is getting soundly beaten by Apple's iTunes. This deal's unlikely to change that.
The AOL deal gets Amazon.com some cheap awareness, and gets AOL out of a losing competition with iTunes. But exposing Unbox to AOL's ever-shrinking membership doesn't solve Amazon's real problem: Without top-to-bottom control of both hardware and software, Amazon can't deliver as finely tuned an experience as Apple can with iTunes, iPod, and Apple TV. Also, novelist Cory Doctorow really dislikes Unbox's User Agreement, which is sure to turn away tens if not dozens of potential customers.