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Study: Amazon Is Nibbling Netflix's Lunch


When Amazon launched its Prime instant streaming video service, the company was expected to encroach on Netflix's territory.


When Amazon (NASDAQ:AMZN) launched its Prime instant streaming video service, the company was expected to encroach on Netflix's (NASDAQ:NFLX) 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 the rise.

"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 percent.

Seventeen percent of respondents said that they are more likely to cancel their Netflix subscription now that Amazon Prime has 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:LGF), MGM and Paramount (NYSE:VIA).

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:AAPL) iTunes achieved the highest "Very Satisfied" rating (35 percent). iTunes was followed by Netflix (23 percent), Amazon (22 percent) and Hulu Plus (20 percent).

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