Steve Jobs finally took the wraps off the Apple (Nasdaq: AAPL) iTunes movie rentals we've all been anticipating. With a modicum of theatrics, considering that the unveiling took place at the Macworld Conference & Expo, the new service turned out to be (drumroll, please) ... a near-clone of Amazon (Nasdaq: AMZN) Unbox, just tied to a different set of gadgets. Whoop-dee-doo.

Rat race
You could already buy movies from iTunes, digital downloads "protected" by Apple's own FairPlay DRM software. About 1,000 rental titles will be available by the end of February, alongside more than 1,400 download-and-own movies and TV show episodes in the store today. Compare that to 5,656 Unbox items available to own today, and 4,061 rentals. But despite the limited inventory, Jobs bragged about having sold 125 million TV shows and 7 million movie downloads, "more than everyone else put together."

That would basically be the Amazon service, as alternatives like Movielink, CinemaNow, and MovieBeam were crippled by high prices and unreasonable restrictions from the start. So when Netflix (Nasdaq: NFLX) launched its video-streaming service last year as a free perk for subscribers, it filled a vacuum in the market.

You're getting the service free anyway, so there's no reason not to play with it a bit and see if downloading rings your bell. That's only more true now that you can watch those 6,000 movies online to your heart's content.

Catch and release
I see the revamped iTunes store as a very direct competitor to Amazon Unbox, while iTunes and Netflix Watch It Now play to very different segments of the audience. Apple offers mostly new releases, available 30 days after the DVD release, and you have to pay before you can play. There's no subscription fee, though.

If you want a new release from Netflix, it'll have to be through the usual DVD mailers. Waiting two days for the mailman requires a different sort of patience than waiting 30 days for a download license window. In the meantime, you have all the classics you care to watch for as little as $9 a month. I know that Netflix has a lobbying office in Hollywood and is working hard to get the license rights Apple is flaunting. Maybe new release rights just aren't cost-effective for a free service.

As for Amazon, it's a question of hardware. Apple has built a digital ecosystem around the iTunes/iPod combo, adding the iPhone and a redesigned Apple TV along the way. You can't just buy songs or movies off iTunes and transfer them to a Zune or an Xbox 360 willy-nilly. Likewise, Amazon movies are tied to Microsoft's (Nasdaq: MSFT) DRM software and won't work on an Apple gadget.

The double-A duo is also competing head-on with on-demand and pay-per-view movies from cable operators like Comcast (Nasdaq: CMCSA) and Time Warner Cable (NYSE: TWC). They shoot for the same impatient demographic, but often without the 30-day release delay. For example, the Mr. Woodcock DVD was released yesterday, and I can get it today through my cable box. And it's available on Unbox, but not iTunes. Tough break, Mr. Black Turtleneck.

Finally, nobody knows how Jim Keyes aims to use Movielink now that Blockbuster (NYSE: BBI) owns it. Chances are that it'll be another pay-per-rental platform tied to store coupons and whatnot. It'll take time to turn Movielink into something unique and appealing.

Cape fear
The new rental service stands atop a solid platform of millions of iPods, whose users really would like to watch the occasional bit of filmed entertainment on their prized gizmos. Kudos to Apple for building a massive lead in the portable media market and then turning it into a multimedia powerhouse.

Amazon's digital department must be a somber place today. But in Los Gatos, it's business as usual for Netflix.

Further Foolishness:

Netflix and Amazon are Motley Fool Stock Advisor recommendations, and Microsoft is a Motley Fool Inside Value pick.

Fool contributor Anders Bylund is a happy Netflix owner and subscriber, but holds no other position in any other company discussed here. You can check out Anders' holdings if you like, and Foolish disclosure is always competing for your attention.