Wednesday, April 8, 2015, 10:34 AM ET|Posted by Will Richmond
Strategy Analytics has released the results of a new survey which validate Amazon's decision to bundle Prime Instant Video with free 2-day shipping in its Amazon Prime service. Although Prime members say they're more likely to subscribe to Prime for the shipping benefit than for the videos, once they have the Prime service, they watch the videos almost as they much as they use their Netflix subscriptions.
The survey revealed that 59% of U.S. Amazon Prime members used Instant Video in the past month, almost at parity with the 63% of Prime members that used Netflix. Overall, the survey found that 36% of Prime members only used Instant Video, almost equal to the 40% that only use Netflix, and the 23% that use both. The 40% of Netflix-only's are clearly a huge target for Amazon to pursue as it builds out the Prime Video benefit.
Stepping back, I think the data should be read as very encouraging to Amazon. Rather than launching a standalone video subscription service, Amazon included video as a bonus to drive Prime membership. A recent analysis indicated that Amazon now has 40 million U.S. members who spend $1,500 per year vs. $625 per year spent by non-members, demonstrating how important Prime has become to the company.
The fact that Instant Video usage is already almost at parity with Netflix among Prime members comes despite the fact that Netflix has been streaming longer, has a deeper catalog, has scored with at least 2 big originals ("House of Cards" and "Orange is the New Black" among others), has a value proposition specifically in video and has one of the best UIs around while Instant Video still remains sub-optimal.
As Amazon further beefs up its original offerings, licenses more popular content, raises awareness among Prime members for its video and improves its UI, usage will no doubt increase further. This in turn will create stiffer competition for Netflix and all other standalone OTT services.
Video Research Around the Web
- Netflix Extends Lead in U.K. Amid Boom in Subscription Streaming Services Variety
- YouTube Videos Featuring Young Children Get Triple The Views Of Videos That Don’t (Study) Tubefilter
- Roku and Amazon Now Control Nearly 70% of U.S. Streaming Media Player Market Multichannel News
- Americans Want to Pay $21 for All Their Streaming Services Combined, Poll Finds The Hollywood Reporter
- TV Long View: The Mind-Blowing Amount of Time Americans Spend Watching TV The Hollywood Reporter
- Targeted Video Ads Jump 48% In 1st Quarter: Freewheel B&C
- Roku Commands 15% Of All Media Streaming Devices Mediapost
- Cord-Cutters Show Interest in Discovery Channel: Survey Multichannel News