At one point in the past management at Amazon decided to release as few numbers as possible to the public. This is unfortunate not just for us analysts but also for example for Amazon’s platform ambitions as we discussed here:
If developers don’t know the size of the addressable market on one platform they will be hesitant to support it. Even if supporting it doesn’t take a lot of time and effort.
If the Fire tablets sell as well as Amazon wants us to believe they would be wise to publish sooner rather than later a concrete number of Fire tablets in use.
The app ecosystem needed for the Fire OS to be relevant can not be treated like the publishers are with the Kindle. Those ecosystems are completely different. There is a large number of app developers big (like AirBnB) and small (like the game developers mentioned by Amazon) that have to be convinced Fire OS is worthwhile and will stay so.
Anyway, thankfully sometimes insightful numbers can come from unusual places. Peter Kafka is reporting at Re/code on fresh numbers from Sandvine, a broadband services company:
Much of the increase comes from YouTube and Netflix, which already accounted for more than half of your broadband usage a couple of years ago, and continue to grow. But now those services are joined by relatively new entrants, like Amazon* and Hulu, which barely registered a couple of years ago and now account for nearly 6 percent of usage.
(This is just North America, not global.)
Amazon Video being this high up tells us a few things:
- People enjoy their Amazon Prime Instant Video. (I suspect the majority of this is Instant Video with only a small amount accounting for digital video rentals and such.)
- Instant Video is an important driver for new Prime sign-ups, but these numbers show that Amazon’s video offering is not just a honey trap but actually providing value for Prime subscribers (or otherwise they would not be using it to push it up to 3.11% of downstream traffic share)
- As Peter Kafka mentioned Amazon Video is growing tremendously in usage. Amazon’s investments in licenses and original content is paying off.
- Happy Instant Video watchers are not canceling their Prime memberships. (Remember Prime as a whole is still cheaper per month than Netflix’ middle tier.)
- Netflix is massive. Not surprising given Netflix is a dedicated service. There is still a lot of room to grow for Amazon’s Video offerings.
- You see any competitor catching up to Amazon Video? YouTube Red might become a strong competitor. But Amazon has if not the second place than the third place as a mainstream video streaming provider secured, it seems. Again, this is important given how for a lot of people Prime Instant Video is the main reason to give Amazon Prime a first try.