Amazon appears to be making all the right moves. While Netflix continues to dominate the streaming video market – between 50 and 60 percent of U.S. broadband households are subscribers, Amazon Prime Instant video is rising fast, reaching about 20 percent of households, according to a recent study by Parks Associates. The numbers reflect huge strides for the company over the last few years, far outpacing Netflix in terms of year-over-year growth in the U.S.
Polling 10,000 U.S. broadband households, the Parks Associates Q1 2014 survey determined that the number of Amazon Prime Instant Video subscriptions has grown – on average – more than 55 percent annually since 2012; by comparison, Netflix has seen an average annual growth rate of just 16 percent for service subscription numbers in that same time period. Hulu Plus trailed behind both services, with just 12 percent of households reporting Hulu Plus subscriptions. The numbers are telling, but it’s also important to remember that Netflix has reached a much higher saturation rate which will, by nature, lead to less growth
The report further looked at broadband connected households with connected CE (consumer electronics) devices, meaning a media streamer of some sort. CE users subscribing to Netflix did not substantially change between 2012 and 2013, yet in that same time period the number of connected CE users with an Amazon subscription more than doubled, increasing from an average of approximately 13 percent to 27 percent. Despite Netflix’s firm grasp on the streaming business right now, there appears to still be plenty of room for other players to expand.
Parks Associates’ research director, Brett Sappington, says that “Amazon’s growth shows how dynamic the OTT (over-the-top) space truly is. While Netflix remains the dominant player, consumers are still open to alternatives with interesting content and business models.”
Amazon has worked hard to keep up with Netflix in 2014, most recently with a content deal with HBO and the release of its new Fire TV set-top box, which both serve as further motivation for users to throw down the cash for Prime membership.