As expected, Amazon has announced its new and improved Amazon Prime service that now offers more than 5,000 streaming TV shows and movies to customers. Those who already pay the $79 per year for Prime won't have to pay any extra to get access to the streams. Video will be available on Macs and PCs in the US, as well as a number of set-top boxes.

Amazon has been rumored to be working on such a service for some time now, but the stakes were raised earlier this month when Amazon accidentally let a few movie pages show up on Prime subscribers' Amazon accounts. That was a hint that the service was on the verge of launch, and we speculated that Amazon was looking to leverage its massive built-in audience to try to take on movie streaming giant Netflix.

According to Amazon, there are almost 200 Internet-connected Blu-ray players, TVs, and set-top boxes that can play videos from the new service (which is being rolled into Amazon's TV and movie rental service, called Instant Video). Most of those set-top boxes are relatively obscure, but one will be the ever-popular Roku, which will offer the new streams as part of its Amazon Instant Video channel starting today.

Prime customers will still be able to get their discounted two-day shipping and can even continue to share those shipping deals with family members. However, family members who are added to a Prime subscriber's account won't be able to access the Instant Videos—only the person shelling out the $79 will be able to watch Amazon's streams, while the other people on the account are prompted to upgrade. (Student accounts don't get access either.)

Selection-wise, things are looking OK, but not great just yet. I spent some time searching for shows that I regularly watch via Netflix—so far only one of them (Wild China) seems to be available to stream from Amazon Instant Video. On the PC or Mac, the site uses Flash to display the video and otherwise looks and works exactly as one would expect; it plays in the browser and can be popped out or full-screened. The quality looked fine too, and certain (but not all) videos are available in HD.

Our initial takeaway from the announcement is that it's a good start—and certainly a nice freebie to those who already subscribe to Prime—but things are a little bland out of the gate. It's not yet at the point where I would want to cancel my Netflix subscription in favor of Amazon, though I would consider it if the selection improves over time (which it undoubtedly will).

Amazon does have one major point in its favor though: price. Netflix's streaming-only plan costs $7.99 per month (or $95.88 per year), making it almost $20 more per year than Amazon Prime. That's not a massive savings, but when combined with the free two-day shipping deals that also come with Prime, Amazon's offering looks a little sweeter.