AOL turns to Amazon for video downloads

By Ed Oswald, BetaNews

December 3, 2007, 2:01 PM

After apparently sluggish sales at its own homegrown store, AOL has decided to end its own video download service and outsource it to Amazon's Unbox.

Although financial terms of the deal have not been disclosed, both sites would split revenues from videos sold through AOL, the companies said. AOL's own service lasted for about one year.

Data from Compete.com indicates that the overall AOL video site only managed to pull a 6% market share as recently as February of this year. From this it could be deduced that AOL likely had a very small audience to begin with, and on top of that an even smaller audience actually willing to pay for videos.

Overall, video downloads have been a tough business to make any money on as past efforts have shown. Google recently did away with its own premium video service in favor of promoting YouTube, and the only company so far to have any success has been iTunes.

Since the inception of the video store, Apple has managed to sell some 100 million TV shows and over two million movies. Even so, it still makes up a fairly small portion of iTunes revenue overall.