A new report from Nielsen finds that Amazon Prime Instant Video reaches 13 percent of all U.S. homes with televisions, twice the reach of Hulu Plus.
A new report suggests that Amazon’s streaming-video service, Prime Instant Video, is now twice as large as Hulu, and gaining ground on Netflix.
Nielsen, the media-measurement firm, found that 13 percent of all U.S. television households use Prime Instant Video, Amazon.com’s subscription video-on-demand business, compared with 36 percent for Netflix and 6.5 percent for Hulu Plus. Amazon declined to comment on the report.
Nielsen didn’t provide historic data, but it’s clear that Amazon’s share is growing. A year ago, another firm, Qwilt, measured the volume of video-streaming traffic consumed by U.S. broadband customers. Back then, Netflix accounted for 57.5 percent of that volume, followed by YouTube at 16.9 percent and Amazon at 3 percent.
The report looks broadly at the use of subscription-streaming video in the United States. Nielsen found that more than 40 percent of U.S. homes had access to a subscription-video service as of last November, and 13 percent of U.S. homes used more than one subscription-streaming service. Homes that use those services watch nearly 50 minutes more video a day than homes with televisions but none of those subscription offerings.
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The Nielsen data also shed some light on the number of Amazon Prime customers who use the streaming service. Prime Instant Video is included in the company’s $99-a-year Prime service, which also offers two-day shipping on millions of items from Amazon.com at no extra charge.
Analysts have estimated that Amazon has 40 million or so Prime members. But the company, always reticent to disclose details of its operations, has never said exactly how many Prime subscribers there are, let alone how many of them use the video service.
But the Nielsen data, coupled with subscription data that Netflix has disclosed, offers a bit more insight. In January, Netflix said it had 39.1 million U.S. streaming subscribers at the end of 2014. According to Nielsen, Netflix’s share of U.S. streaming subscribers is 2.8 times as large as the number of Amazon’s video-streaming users. That suggests, then, that about 14.5 million Prime subscribers used Amazon’s subscription-video service last year.
One reason is Amazon has been pumping huge sums of money into the business. Amazon estimated that it would spend $100 million in the third quarter alone on original content for the service. Those funds have helped Amazon pay for programming such as “Transparent,” a show about a father who gradually lets his children know he identifies as a woman. The show won Golden Globes for best TV series, musical or comedy, and for Jeffery Tambor as best actor in a TV series, musical or comedy.
While Amazon is competing for the same video-crazed customers at Netflix and Hulu, its business model is entirely different. The company wants to boost membership in Prime because those customers are among Amazon’s most loyal, spending three times as much as non-Prime shoppers buying items from the retail site, according to some analyst estimates.