Amazon’s efforts to challenge the supremacy of Netflix are starting to pay off, with Prime Video proving to be the fastest-growing video-on-demand service in the UK last year.
New series of The Grand Tour and Transparent, as well as hefty cross-promotion of Prime Video to regular Amazon shoppers, helped fuel a 41% year-on-year rise in subscribers to 4.3m households, according to figures from Barb, the UK TV ratings body.
Prime Video, which is offered as part of Amazon’s £79 annual Prime subscription package of perks, including free one-day delivery, was in 3m households at the end of 2016.
Netflix grew at the slowest rate of the three main UK subscription video-on-demand services, which includes Sky’s Now TV.
Netflix remains by far the dominant player in the UK, fuelled by the attractiveness of hit shows such as Stranger Things and big-budget films such as the sci-fi offering Bright, starring Will Smith.
However, Netflix’s slower rate of growth, albeit still an impressive 25% year-on-year, was off the back of a much larger base of subscribers, meaning overall it added the most new households of any service. Netflix added 1.6 million new subscribers, compared to Amazon’s 1.3 million, meaning it actually extended its lead over Amazon by about 300,000 households last year.
By the end of last year, Netflix was in 8.2m households, up from 6.6m at the end of 2016.
Richard Broughton, an analyst at Ampere, said Amazon’s huge scope for cross-marketing to online shopping customers and a strategy to increase investment in exclusive content such as bringing Lord of the Rings to TV and buying the UK rights to ATP Tennis will help it keep up its faster-pace growth and eventually close the gap with Netflix.
“Amazon has been struggling to close the gap with Netflix in the UK,” Broughton says. “Amazon is making big strides to invest in content but it is still not close to the extent of the Netflix originals slate and it doesn’t yet have the same brand perception for TV as Netflix does. If Amazon continue to invest at the rate they are – things like Lord of the Rings and sports rights – bundling it with the general attractiveness of Amazon Prime, there is a good chance they could catch up in the future.”
Sky’s Now TV grew 40% last year to reach an estimated 1.5m households.
Barb said last year marked the first time that the number of homes taking at least one of Netflix, Amazon or Now TV broke the 10m barrier. In terms of access by age demographic, Barb found that 55% of all children under 16 have access to one of the three subscription video-on-demand services.
This rises to 62% of 16 to 24-year-olds, then drops back to 56% of 25 to 34-year-olds and 52% of 35 to 44-year-olds. Netflix is watched by plenty of 45 to 54-year-olds (48%) but its popularity then begins to taper off, with only a third of 55 to 64-year-olds watching and 24% of over 65s.
