Amazon Prime reels in SVOD subscribers, but Netflix binds them, study says

Americans are far more interested in Amazon (NASDAQ: AMZN) Prime's free two-day shipping benefit than they are in its streaming video offering, a new study by Strategy Analytics says. In fact, once they're done ordering a physical product from the online retail giant, many viewers then hop on over to Netflix (NASDAQ: NFLX) to stream content that can also be found on Prime Instant Video.

The survey found that 63 percent of Prime subscribers used Netflix at least once in the previous month, and of those who also use Prime Instant Video, 59 percent accessed Netflix in the previous month. Furthermore, just 44 percent of subs in the U.S. stream Prime Instant Video at least once a week.

Strategy Analytics Amazon Prime vs. Netflix

(Source: Strategy Analytics)

"Amazon is needlessly 'losing' users to Netflix when, in fact, it should be eating into their user base," said Leika Kawasaki, digital media analyst for Strategy Analytics, in a release. "Amazon Prime offers subscribers multiple benefits, there are more Amazon-capable devices and the subscription is slightly cheaper. Yes, Prime Instant Video has been lagging behind Netflix in original programming but it's been making significant moves to address this recently."

While the survey didn't go deeply into detail on why Amazon Prime subscribers disconnect from its SVOD service, it did provide some surface insight. Owners of Amazon's Kindle e-reader or Fire TV are 10 percent more likely to stream Prime Instant Video on a regular basis. But as many device owners and Prime subscribers know, shopping for products on Amazon and streaming video typically require accessing separate apps or a browser, adding complexity to the experience. As Kawasaki notes, "Amazon has not had the same level of success as Apple in creating a unified ecosystem of device and services."

Strategy Analytics surveyed nearly 5,000 consumers between the ages of 18 and 74 in the U.S., Germany, the UK and France during November and December 2014. The survey is part of its Consumer Metrix report.

Amazon is, of course, aware of its Prime subscribers' behavior. While not giving out too much detail, CFO Tom Szkutak noted on the company's fourth-quarter earnings call that Prime Instant Video customers frequently cross over to purchase items from its retail site. "What we see is customers who come in through our Prime pipeline for video for a free trial, those customers are converting at higher rates to other channels," he said.

For more:
- see the release

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