Commentary

Amazon Prime Subscribers Just In It For Two-Day Delivery Deal?

Getting video content is getting to be a dollars and cents calculation and you’ve probably figured that out by now. But why do we buy the OTT service or online content we do? A good question.

A new report from Boston’s Strategy Analytics polled 5,000 consumers and discovered that in this country, they’re apparently more likely to subscribe to Amazon Prime to get the free two-day shipping than access to Prime Instant Video. And those who subscribe to Amazon are more likely to use Netflix instead.

This report, out today, says 63% of Amazon Prime subscribers in the U.S. used Netflix in the previous month, compared to just 59% who used Prime Instant Video. That’s kind of confounding, since an Amazon subscriber can easily access content from a variety of devices, but that’s also true for Netflix. And as this report ends up suggesting the answer is the same old same old: Content is king.

Or: The perception is that Netflix has more, including more original programming that Amazon.

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“Amazon is needlessly ‘losing’ users to Netflix when, in fact, it should be eating into their user base,” says Leika Kawasaki, a digital media analyst for Strategy Analytics, in a statement. “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.”

I’d say that’s true. Amazon’s “Transparent” won a Golden Globe, and it has several series that are worth watching, but Amazon does seem to be generally taking a middle-brow approach to programming.

Strategy Analytics’ research says Americans are twice as likely as Britons to cite two-day delivery service as an important factor in their decision to subscribe. And only 44% of U.S. subscribers use Prime Instant Video at least once a week, compared to 55% in Germany and 54% in the U.K.  

In an email back and forth, Michael Goodman, director of Digital Media Strategies for Strategy Analytics, posits, “While Amazon is investing in original programming to increase both the quality and quantity available on Prime Instant Video it still lags well behind that of Netflix.”

But whatever Amazon does, it’s playing follow the leader--which is not quite the case outside the U.S. Netflix was in the space first; “House of Cards” caught the imagination of the press and the public; and it seems to be the flag-carrier for the alternative content business. Amazon is the Dave Clark 5 to Netflix’s Beatles, to strain an old reference.  Or how about, Netflix is Prius and everybody else isn’t?

An even handier comparison is HBO to every other cable premium service.  Showtime presents quality originals, but even with valiant efforts to polish that image, it’s not HBO. “Each service does have unique content, so just as people subscribe to HBO and Showtime or HBO and Starz it is not out of the question that people want both Prime Instant Video and Netflix,” Goodman wrote in his email.

But it just might be that Amazon Prime subscribers bought in for something besides the video service, and mainly for the two-day shipping. Goodman  mentions, for example, features like Amazon Mom and Amazon Student. For them, the online video service may be just a fall back service. 

Goodman also notes the obvious: Subscribers may have had Netflix first, and for whatever reason--deliberate choice or just inertia--never quit.

Personally, I was going to get the Amazon Fire set-top box anyway, but the two-day delivery deal made it an absolute no-brainer, and that’s likely what Amazon figures.  If in the future a user will have many options to get essentially the same service, but with a few extras, maybe Amazon’s “extra” is alluring. It’s not just special programming. It’s special delivery.

But you can’t say Amazon pushes all that hard. Its own online sales job for Amazon Fire says, “Amazon Fire TV is a tiny box you connect to your HDTV. It's the easiest way to enjoy over 200,000 TV episodes and movies on Netflix, Amazon Instant Video, and HBO GO, plus games, music, and more.”

It doesn’t even give itself top billing.


pj@mediapost.com

1 comment about "Amazon Prime Subscribers Just In It For Two-Day Delivery Deal?".
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  1. Michael Kelly from CloverLeaf Technologies, April 8, 2015 at 1:41 p.m.

    Netflix is more popular because it's interface is better than Amazon's - with Amazon it is hard to tell which videos are free - where all Netflix streaming videos are free

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