Amazon Catching Up to Netflix, iTunes

CIRP Analyzes How Frequently Consumers Use On-Demand Video Services

Consumer Intelligence Research Partners (CIRP) released analysis of consumer behavior for US on-demand video services, including Netflix (NFLX), Amazon (AMZN), and Apple (AAPL).

CIRP analyzed how frequently customers of different on-demand video services use those services. CIRP finds that among subscription services, Netflix customers are the most frequent users of their service. Amazon Prime members use both the free Amazon Prime and paid Amazon Instant Video offerings about as frequently.

CIRP data indicates 86% of Netflix members use its service more than once a week, while 27% of iTunes viewers use its service more than once a week (Chart 1). Based on these reported frequencies, CIRP estimates that on average, Netflix members view video 12.7 times per month, while iTunes users buy or rent video 4.9 times per month.

Chart 1: Frequency of Use of On-Demand Video Services, Q4-2014

Not surprisingly, subscription services enjoy much more frequent use. At least 80% of Netflix and over half of Amazon Prime members, watch at least one streaming video per week on these services, compared to about one-quarter of iTunes customers. Almost half of Netflix members use Netflix more than five times per week, compared to under one-quarter of Amazon Prime members and only 11% of iTunes users.

Based on reported frequency of use, CIRP estimates that on average, Amazon Prime members use the free streaming video service 8.3 times per month. In addition, Amazon Prime members buy or rent video from the Amazon Instant Video service on average 5.1 times per month. Amazon Prime members thus use Amazon for video on average 13.4 times per month.

Amazon cleverly offers both a subscription and a single-pay service. Amazon Prime customers use the free streaming video that they receive with their membership somewhat less than Netflix members use their service. 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 also caught up to iTunes in terms of frequency of use. If we compare the two single-pay services, Amazon Instant Video and Apple iTunes, then we see that consumers buy or rent video from iTunes 4.9 times per month, compared to 4.5 times per month for all Amazon consumers, both Amazon Prime members and others, that buy or rent video using Amazon Instant Video.

Netflix pioneered streaming video, and specializes in it, while iTunes reaches hundreds of millions of Apple hardware buyers. Amazon started much later, and used its Prime membership to sell additional streaming video beyond what they provide through the free streaming service. Now, Amazon customers look to it for video about as often as they use Netflix and iTunes.

CIRP bases this analysis on our current survey of 500 US subjects who used on-demand video in the October-December 2014 period. For additional information, please contact CIRP.