As of the third quarter 2021, Amazon Prime Video’s subscriber penetration rate is at 45% of internet households in the United States, new consumer research from Parks Associates’ Video Services Dashboard reveals. Moreover, the study estimates that in the first quarter of 2021, 77.3 million US households were members of Amazon Prime and that around 71% of them watched Prime Video.
Amazon Prime Video is one of the four foundations of the consumer streaming stack, along with Netflix, Disney+, and Hulu. The platform is one of several benefits of an Amazon membership, but Amazon, like its competitors in the OTT space, is investing in original content offerings to keep its subscribers engaged, to encourage new subscribers, and to lure in cord cutters and service hoppers. Many OTT services aired Super Bowl ads this year, promoting not just one title but the range of their content library, to remind viewers of the total value of each subscription.
“Amazon's Prime pricing rise, the fourth in its history, comes barely a month after Netflix raised its fees, while Hulu raised its prices last year. Amazon also debuted its ‘Lord of the Rings’ trailer during the Super Bowl this year, so the firm obviously hopes the value they are bringing in content will offset any consumer reluctance to pay higher prices. With inflation and the cost of content on the rise, we will likely see more providers start to slowly raise their subscription prices, trying to find that balance between revenue growth and consumer value,” said Eric Sorensen, Senior Contributing Analyst at Parks Associates.
"These price increases by Amazon have been fully vetted out as part of their long-term strategy to generate more revenue from subscribers over time. Supply chain and increasing shipping expenses are being passed down to customers, but it is doubtful that Prime members will object to a twenty-dollar-a-year membership rise, the first in four years," Sorensen added.