It looks like rumors of Amazon launching a Netflix-like video streaming service were spot on. The company has just announced that subscribers to its $79 per year Prime service will now have access to more than 5,000 commercial free, instant streaming TV shows and movies at no extra cost. That's on top of the convenience of unlimited free two-day shipping – a benefit that can be shared with family members using separate accounts – and yet it would still come in cheaper on a yearly basis than Netflix's $8-per-month ($96 annually) Watch Instantly offering.

In terms of available content Netflix appears to have the upper hand, though. Most of the Amazon Prime Instant Video titles highlighted on the site are also available on Netflix's Watch Instantly, which boasts roughly 20,000 streaming video selections. Nevertheless it will be interesting to see how Amazon fares in acquiring new content for its service.

Video will be available on Macs and PCs in the U.S. as well as a number of set-top boxes such as the Roku. If you are already an Amazon Prime subscriber and have tried out the new service let us know your thoughts in the comments.