Amazon Prime Instant Video subs also buy and rent

October 13, 2014 09.14 Europe/London By Broadband TV News Correspondent
37% of US broadband households regularly use transactional services for OTT video, such as online video rentals and downloads, according to Parks Associates.

The vast majority of consumers making these a la carte purchases also have a streaming video subscription, emphasizing the potential role of transactional services to supplement subscription OTT. For example, approximately two-thirds of Amazon Prime Instant Video subscribers also rent or purchase titles through the service, and their average expenditures are increasing. By contrast, expenditure on downloads among Netflix subscribers is decreasing.

“Subscription services are the most popular form of OTT video, but a transactional service that offers a wide selection of titles and easy-to-use controls can score with consumers and create new revenues,” said Barbara Kraus, director, research, Parks Associates.

“However, the lack of content can be the death knell for a service. Verizon and Redbox ended the Redbox Instant service this week, which failed in large part because only a limited number of titles were available to rent through its streaming library. What the service needed was a large selection of online titles, with easy access for streaming.”

Parks Associates research also reveals the type of CE platform in use can influence money spent on transactional OTT purchases, a trend Amazon is looking to exploit with its Amazon Fire TV streaming devices.

The firm’s 360 View: CE Adoption and Trends, which includes data and analysis of a 1Q 2014 consumer survey of 10,000 U.S. broadband households, finds that among frequent users of streaming media players, 80% pay for monthly streaming services, such as Netflix, but also nearly 30% stream video rentals and 20% buy video to stream.

These users are US broadband households with internet-connected CE that use a streaming media player such as Roku or Apple TV more frequently than any other device.