New research from analyst Parks Associates has revealed that just over a third (37%) of US broadband households regularly use transactional services for over the top video, underscoring the growing commercial clout of online video and OTT.
In particular, Amazon Instant Video was highlighted as a transactional hot spot, with the majority of its consumers also holding a streaming video subscription, which suggests that extent to which la carte purchases can supplement subscription OTT.
Around two-thirds of Amazon Instant Video subscribers also rent or purchase titles through the service, according to Parks Associates, and their average expenditures are increasing. By contrast, expenditure is decreasing on downloads among Netflix subscribers.
"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," says Barbara Kraus, director of research at 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."
This an area in which Amazon dominates, but it is also looking to take this competitive edge a step further with its Amazon Fire TV streaming devices, which have been developed based on Amazon’s360 View: CE Adoption and Trend report.
The report found that among frequent users of streaming media devices, 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 that use a streaming media player such as Apple TV or Roku more often than any other device.
Clearly Amazon sees their Amazon Fire device as a way to keep them within the Amazon ecosystem.