WATCH OUT NETFLIX: People are streaming more video on Amazon than Netflix now
Research firm Consumer Intelligence Research Partners (CIRP) just released a new study showing that people stream content on Amazon as much (or more) as on Netflix, thanks to Amazon's decision to offer both a subscription and single-pay service in the same place.Amazon's magic is that people who subscribe to Prime - the company's $99-a-year service that comes with two-day free shipping and thousands of free movies and TVs - will also buy other movies and shows from Amazon that aren't listed as free.
Netflix members view video 12.7 times per month, iTunes users buy or rent video 4.9 times per month, and Amazon Prime members view free Prime video 8.3 times per month.If Amazon just offered its subscription service, Netflix would still the king of streaming video content.
But, it doesn't. If you factor in CIRP's finding that Prime users also buy or rent content from Amazon Instant Video 5.1 times per month, Prime members view video on Amazon 13.4 times total per month - more than Netflix."Amazon doesn't do anything any way anyone else does it," Mike Levin, CIRP's cofounder, told Business Insider. That's what makes its system so clever. "Amazon Prime customers use the free streaming video that they receive with their membership somewhat less than Netflix members use their service," Levin writes in the report. "But, Amazon Prime customers also buy or rent additional video using Amazon Instant Video, say when a video is not available on the Prime streaming service. We combine the Amazon Prime streaming and Amazon Instant Video use to conclude that Amazon Prime members use video from Amazon about as often as Netflix subscribers use video from their service."
Amazon has poured a bunch of money into Prime Instant Video - $1.3 billion to be exact - to try to make Prime more attractive. Generally, Prime members are believed to spend more than double what non-members do on the site.
Now, there's some indication that it might actually be paying off.For what it's worth, this is not a winner take-all situation. Plenty of people will subscribe to both Amazon and Netflix. But, Amazon's success in a relatively short period of time is something everyone in the TV/video industry should be watching.
(CIRP based its analysts on a survey of 500 Americans who use on-demand video.)
Disclosure: Jeff Bezos is an investor in Business Insider through his personal investment company Bezos Expeditions.
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