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Amazon gains ground on Netflix, denies free ad-supported streaming service

The big red elephant in the room is deflating. While Netflix still holds an enormous lead on other streaming services when it comes to sheer volume of broadband traffic, the massive gap between Amazon and Netflix’s respective shares of North American online traffic has begun to decrease as Amazon’s share more than doubled over the last 18 months, according to recent studies.

Canadian-based networking equipment company Sandvine released its 2014 Global Internet Phenomena Report which states Netflix accounts for 32.2 percent of Sandvine’s 250-plus global customers’ aggregate traffic over a month span, with Amazon Video distantly behind at 2.37 percent. A year and a half ago, Amazon Video accounted for less than 1.2 percent. It’s not a big number, but it’s progress.

The margin between the two services might very well continue to shrink, however, thanks to new developments. The New York Daily News reported on Friday that Amazon is on the cusp of unveiling a free, ad-supported video service unbundled from its Prime subscription service, which one analyst said could make it a “Netflix killer.” No word has been given as to when Amazon will deploy its new service, but the report suggests it may launch early next year.

Update by A/V Editor, Caleb Denison 11/23/14: In a letter to Engadget, Amazon stresses that it “has not announced any plans to offer an ad-supported streaming service,” but stops short of claiming it has no plans to implement one in the future. In the statement, Amazon clarifies that it does offer the first episode of many titles for free, and that it is always experimenting with new ways to serve its customers, but the company made it clear that it would not humor speculation of a free version of its streaming video service. 

Additionally, Amazon has promised its forthcoming 4K UHD video content will be free of charge for those who pay for Prime membership, while Netflix has implemented a new plan to charge customers an extra 25 percent for its 4K UHD content.

Amazon’s latest initiative to add original content has also likely contributed to its rise in the streaming charts, with 80 percent of its estimated 25 million Amazon Instant Video users (roughly 20 million) binge-watched at least two episodes of its series Transparent which was released this October. Amazon is set to release its next original series, Mozart In The Jungle on December 23rd. And then there’s the addition of a massive library of older HBO classics like The Sopranos, Eastbound and Down, and older seasons of shows like Trueblood, and Boardwalk Empire.

While there’s no doubt it has a long road to climb if it wants to catch the big red king of the hill, the latest developments prove Amazon is moving in the right direction, with plenty of wind at its back.

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