These days, Barnes & Noble (NYSE: BKS) is more likely to appoint a Labrador as CEO than it is to excite investors. But in an unexpected twist, the company got a boost from its latest announcement -- it's going to offer a video service on the Nook. Not only is it putting a service together, but it's doing it with some names that have been reluctant to enter the wider streaming world. While it's not going to be enough to reinvigorate the whole company, it's a step in the right direction, and competitors should be concerned.

The announcement
The new Nook service is coming soon, and it won't just be for Nooks. The service will allow customers to rent or buy videos, which can then be replayed on tablets, TVs, and other devices. Unlike Netflix (Nasdaq: NFLX), the Nook service will not be a subscription, but a purchase-on-demand program. That's a model that Amazon (Nasdaq: AMZN) has used alongside its Prime Video subscription service, putting Barnes & Noble in difficult company.

One added benefit of the Nook service is that it will allow customers with compatible devices to add their physical DVD and Blu-ray discs to their account, allowing them to stream the content onto other devices. For the first time in years, it looks like Barnes & Noble actually beat Amazon to the punch. While Amazon did make a January announcement about forming a partnership with UltraViolet, the DVD-to-streaming conversion company, it has yet to implement it on its products.

What it means for Barnes & Noble
It's no stretch to say that Barnes & Noble has had a weird year. Back in April things looked desperate, and hedge fund Jana Partners stepped in with a big purchase, picking up 12% of the company. Then in August, Jana sold it all off, and the stock fell 10% over the month. But the quarterly earnings announced at the end of August looked all right. Same-store sales were up 4.6%, and digital sales saw a 46% increase. But that wasn't enough to push the bottom line into the black, and the company lost $0.78 per share.

The new video announcement should help both of the sales figures through the rest of 2012, and hopefully lead to a profitable 2013. Barnes & Noble is betting that the Nook will see a sales increase in stores, while digital content is clearly the main thrust of the new program. But while an increase in sales and a return to profit might patch the existing holes, what does this mean for the longer term?

Signs of success
One of the most positive signs that the announcement heralded was that content creators still have some faith in Barnes & Noble. Nook Video has formed a partnership with Disney (NYSE: DIS), Sony (NYSE: SNE) Pictures, and HBO, among others. That's a good line-up, and puts it on solid ground in its fight against Amazon. While some investors -- including Fool analyst John Reeves -- are still bullish on Netflix, the move from Barnes & Noble is showing that there might be a better distribution system out there.

Amazon still has the upper hand with its Amazon Prime tie-in, but pricing could now be an issue. Amazon already runs on notoriously thin margins, and increased pricing pressure from Barnes & Noble could be a major irritation. I'll be interested to see how Nook Video prices itself during the lead up to Christmas, when consumers are weighing the pros and cons of tablets.

The bottom line
Let's not cloud the issue: Amazon isn't going anywhere just because Barnes & Noble is streaming videos -- that's not even a concern. But this is one more strike against Netflix, which seems weak to start with. However, I'm more interested in if it's enough of a revenue generator to keep Barnes & Noble afloat. The company learned a lot from Borders' collapse, but that hasn't been enough to completely alter its course.

I'm optimistic that this will be a big deal for Barnes & Noble. More so, I'm optimistic that this is a sign of new thinking from a tired brand. If Barnes & Noble can make this the first of many exciting announcements, then it might be able to fight its way back into the game, and at least coexist with Amazon. There's no rule of business that says it's Amazon's way or the highway. If you're keeping an eye on this space, you should sign-up for the Fool's special reports on Amazon and Netflix.