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Amazon Threatens Netflix Market Share In Streaming Video

A recent study from ChangeWave Research, an independent research firm, found that Amazon.com, Inc. (NASDAQ:AMZN) emerged as a possible threat to Netflix, Inc. (NASDAQ:NFLX) in the streaming video market, as the largest online retailer slowly captures a significant number of subscribers for its Prime instant streaming video service.

According to Andy Golub, an analyst at ChangeWave, Amazon.com is becoming competitive in providing streaming video to consumers. Golub said, “While Netflix still holds the largest share, by far, of the paid alternative TV market, consumers continue to shift towards Amazon’s.com, Inc. (NASDAQ:AMZN) Instant Video service. As Amazon’s TV and movie content become more competitive with Netflix, its popularity is surging among consumers.”

The research firm found that 82 percent of the 1,115 consumers in North America who responded to the survey still subscribe to movies and TV shows from Netflix, Inc. (NASDAQ:NFLX). The result indicated that Netflix subscriptions were down by two percent from the 84 percent result of the previous survey, which was taken in February.

Based on the current survey, the number of subscribers to Amazon’s Prime streaming video service increased from 17 percent to 22 percent. The number of consumers downloading iTunes videos also rose from 15 percent to 16 percent.

The research firm found that 17 percent of the respondents indicated the possibility of cancelling their subscription with Netflix after the retail giant announced its agreement with EPIX, which enables Amazon.com, Inc. (NASDAQ:AMZN) to stream movies from Lions Gate Entertainment Corp. (NYSE:LGF) MGM and Paramount, including The Avengers, and The Hunger Games. Sixty five percent (65%) of the respondents said the agreement has no effect on them.

The survey also indicated that 18 percent of the respondents had subscriptions from both Netflix, Inc. (NASDAQ:NFLX) and Amazon.com, Inc. (NASDAQ:AMZN), a 4 percent increase from the previous survey.

ChangeWave also found that 35 percent of the respondents are very satisfied with Apple Inc. (NASDAQ:AAPL)’s iTunes online video services. Netflix has a 23 percent satisfaction rating, followed by Amazon, with a 22 percent satisfaction rating, while 20 percent of the respondents were satisfied with Hulu Plus.

The study also revealed that 31 percent of the respondents are streaming online videos using a blu-ray player, down by two percent from the previous survey. Consumers streaming videos using the iPad increased by seven points from the previous 25 percent, to 32 percent. Consumers streaming videos through their iPhone declined from 25 percent to 20 percent. People downloading videos from video game consoles slightly declined from 25 percent to 24 percent.

The result show that a majority of consumers want to permanently own or keep the content they purchased, considering the fact that iTunes is the only service that allows consumers to buy and download a video, or individual TV episodes.

Last month, Netflix, Inc. (NASDAQ:NFLX) announced that the number of its subscribers increased to 30 million worldwide.

Carl Icahn purchased 5.4 million shares of Netflix, which prompted the stock price of the company to surge by almost 10 percent yesterday. Icahn believes that Netflix, Inc. (NASDAQ:NFLX) is undervalued; it is a dominant player in the streaming video market, and it has prospects for international growth.