Netflix and Amazon Prime Video are Leading Subscription Video On Demand Services by Wide Margin
Netflix and Amazon Prime Video are two of the more popular Subscription Video On Demand (SVoD) services available, but did you know just how dominant the two are in the marketplace? In a word: extremely.
According to Futuresource Consulting, the SVoD industry reaches more than 60% of households in North America, 26% in Western Europe, 21% in Asia-Pacific and 19% in Latin America and is expected to see revenues climb as much as 25% in 2019, leading to $36 billion in consumer spending. That’s some serious cash.
However, even with new services and a variety of platforms to choose from, consumers are still loyal to Netflix and Amazon, with the two accounting for one-third of all subscriptions globally in 2018. More impressive, the two companies commanded almost two-thirds of the market, with Netflix leading the way in terms of headlines, subscribers and revenue, adding an extra 31 million subscribers to its ranks in 2018, and recently posted last week that it just completed its most successful quarter to date.
David Sidebottom, Principal Analyst at Futuresource Consulting, added this when discussing Netflix’s dominance on the SVoD market.
“Consumers are seeking a combination of functionality, high-quality original content and low price, and Netflix is choosing to invest back into original content programming and its library. Netflix has demonstrated continued growth in both its primary markets of the USA and UK, as well as France and Germany. Plus, Netflix has many options for turning profit, each requiring a local market-specific strategy, based on maturity of infrastructure, device usage, access to local content, GDP and market share.”
With Netflix owning that much of the market, it’s easy to see why some competitors struggle when trying to go toe-to-toe with the SVoD conglomerate. Sidebottom mentioned this, too, saying that, more than ever, consumers are forced to decide which streaming services they prefer to use and trust the most.
“Consumers face an increasingly confusing video landscape, and partnerships between trusted Pay TV or content aggregation platforms like Amazon Channels, Roku, Apple, and even Pay-TV providers, will be a vital aid to navigation. Due to large populations of existing users, Apple and Amazon Channels are both well-placed to succeed in the soon-to-be-fragmented world of aggregation, but both currently lack ubiquity of content internationally. However, this new breed of ‘super aggregators’ will become an important component in the battle for the living room, though, in many instances, they have yet to fully realise the three consumer requirements of quality, original content and price.”