Amazon Prime subscription growth is getting a boost as the OTT video provider ¨unbundles¨ its streaming and shipping services. Subscription growth at Netflix and Hulu is falling short or expectations, however; prompting eMarketer to raise its original 2016 forecast for Amazon and lower it for Netflix and Hulu.

Amazon Prime subscribers will grow to 76.2 million, about 3 million more than eMarketer originally forecast. Allowing customers to purchase monthly Prime subscriptions contributed to the increase. For the year, eMarketer predicts Amazon Prime’s subscriber base will grow 16.5%, the fastest of the services covered.

“Amazon’s growth in digital video viewers is driven by three factors: the success of its Fire TV streaming devices, the roll-out of a standalone streaming video service, and its increased investment in original content, which the Boston Consulting Group estimates at $3.2 billion this year, second only to Netflix among video platforms,” said eMarketer senior analyst Paul Verna.

Advertisement

With 120 million users, Netflix still reigns as the OTT video streaming market leader. E-Marketer attributed its downward revision for 2016-2020 to maturation in the U.S. and management’s decision to raise subscription prices.

amazon prime subscription growth

“Netflix has a larger user base and therefore less room to grow, but it continues to add subscribers in the U.S. and elsewhere thanks to the appeal of its original shows,” Verna said. “The success of these companies, and of the OTT category as a whole, indicates continued momentum for subscription-based, on-demand video.”

The removal of free, ad-supported viewing led eMarketer to lower its forecast for Hulu as well. The market research company expects Hulu’s user base will be cut in half, to 30.0 million in the U.S. this year, as a result and increase just slightly through 2020.

Streaming Media Device Growth
Turning to the use of streaming media devices, eMarketer expects Google Chromecast will continue to dominate due its low price. The market researcher predicts 30.6 million Americans will use Chromecast this year and that it will remain the market leader through 2020 barring any major upsets.

The fastest growing, Amazon Fire’s user base will nearly double by 2020, overtaking Roku in 2017 and putting it nearly on par with Chromecast by 2020.

In contrast, AppleTV is struggling. There are 20.5 million AppleTV users in the U.S. at present, a number eMarketer expects will increase to 25.8 million by 2020. That will leave it far behind the market leaders.

High cost and lack of supporting content apps are the main deterrents, according to eMarketer. “Also, compared with Amazon, Apple has yet to make inroads into original programming,¨ Verna commented.

¨The promise of an Apple ecosystem of content and devices – something it mastered with the iTunes Store a decade ago – has yet to materialize in the fast-growing world of digital television.”

Join the Conversation

Leave a Reply

Your email address will not be published. Required fields are marked *

Don’t Miss Any of Our Content

What’s happening with broadband and why is it important? Find out by subscribing to Telecompetitor’s newsletter today.

You have Successfully Subscribed!