Lovefilm Instant was rebranded to Amazon Prime Instant Video in February as the commerce giant merged the streaming service with its Prime delivery subscription offer to create one bundle.
However, the move – which offers access to more than 15,000 films and TV shows and one-day delivery on purchases from the Amazon website for £79 a year – appears to have had an immediate negative impact on its subscriber numbers.
New figures from MediaBug, media consultancy Decipher’s bi-annual media consumption tracker, shows the percentage of UK online users with an Amazon Prime Instant Video subscription dropped from 8 per cent to 6 per cent in the past six months.
By contrast, Netflix membership has increased from 10 per cent to 14 per cent of UK online users.
Loyalty to the Netflix scheme is also on the rise, with the proportion of subscribers only committing to the service for the free one-month trial period dropping from 39 per cent to 25 per cent in the period.
Decipher says Netflix’s success can also be attributed to its presence on Virgin’s TiVo.
Dr Hamish McPharlin, director of Decipher Media Research, told Marketing Week Amazon was likely hit by its “not very elegant” and “confusing” rebrand of Lovefilm, plus the noise created by Netflix on the content front as it marketed the availability of series such as House of Cards, Arrested Development, Orange is the New Black and Breaking Bad on its service.
Other new entrants to the market are also starting to make their presence felt. Sky’s Now TV service now claims 3 per cent of online UK users, while new service Wuaki has grown to nearly 1 per cent of the online population.
The next results from the bi-annual tracker will show more activity in the market, with the recent UK launches of Google Chromecast, Amazon Fire TV and Roku.
McPharlin says: “These findings really show that the battle for dominance in the Video On Demand space has reached fever pitch. Whilst Netflix is ahead in the online arena, and Sky leads on the TV, the volume of new entrants end up pulling audiences in all directions. The intensity will have to abate at some stage, and in the end, it is the vendors that can provide the best content and the most elegant integration with existing devices and services that will prevail.”
Decipher’s MediaBug tracker is based on an online survey of 3,000 UK consumers. The most recent survey was conducted in March.