When Amazon (NASDAQ:
) launched its Prime instant streaming video service, the company
was expected to encroach on Netflix's (NASDAQ:
) territory. Now Amazon is making meaningful gains that could
greatly alter the future of streaming video. According to a new
study by ChangeWave Research, Amazon subscription rates are on
"While Netflix still holds the largest share by far of the
paid alternative TV market, consumers continue to shift towards
Amazon's Instant Video service," Andy Golub, an analyst with
ChangeWave, said in an e-mail this morning. "As Amazon's TV and
movie content becomes more competitive with Netflix, its
popularity is surging among consumers."
ChangeWave surveyed 1,115 North American consumers in
September and found that 82 percent of respondents still use
Netflix. This is down from 84 percent during the previous survey,
which was conducted in February.
Meanwhile, Amazon Prime subscriptions jumped five points (from
17 percent to 22 percent) and iTunes video downloads increased by
one point (from 15 percent to 16 percent). Hulu Plus raised its
subscriptions by two points, going from six percent to eight
Seventeen percent of respondents said that they are more
likely to cancel their Netflix subscription now that Amazon Prime
signed a deal
with EPIX. In doing so, Amazon Prime will be able to stream The
Avengers, The Hunger Games and other films from Lionsgate (NYSE:
), MGM and Paramount.
ChangeWave also found that 18 percent of those surveyed
subscribe to both Netflix and Amazon Prime -- a four-point
increase from the previous study.
In addition to the primary questions, ChangeWave wanted to
know how satisfied consumers were with their online video
services. Researchers found that Apple's (NASDAQ:
) iTunes achieved the highest "Very Satisfied" rating (35
percent). iTunes was followed by Netflix (23 percent), Amazon (22
percent) and Hulu Plus (20 percent).
This is significant for a number of reasons. First, iTunes is
the only service that does not have a recurring monthly fee
(customers pay as they go). Second, iTunes is the only service
that does not have an option for unlimited streaming. In fact,
iTunes does not stream content at all -- it downloads paid
rentals to the user's device and removes them when they
Third, iTunes is the only service that allows consumers to
content. While Netflix is a place for temporary rentals (most
movies come and go), iTunes users can permanently obtain film and
TV show downloads. This indicates that consumers still value
ownership, whether it's in the form of a DVD or a digital
Fourth, iTunes offers downloadable content that users cannot
get anywhere else. For example, only the four most recent
episodes of select CBS (NYSE:
) dramas and comedies are available to watch on Comcast (NASDAQ:
) On Demand. But iTunes sells all of them, allowing users to
catch up for a relatively small fee. They can also choose to
purchase individual episodes, a benefit not available on DVD.
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