Prime video from Amazon.com, Inc. (NASDAQ:AMZN) is the fastest growing streaming video service, according to researchers at eMarketer.
The research firm estimates that Amazon will have 76.2 million users of its streaming video service by the end of 2016, which is around 3 million more subscribers than previous estimates. Growth in Amazon video has been spurred by the company’s decision to unbundle its streaming video service from regular Prime subscriptions — now users can simply buy a streaming video subscription without Amazon’s signature delivery and others services included.
eMarketer estimates that Amazon’s streaming video service will grow by 16.5% this year. That’s the fastest growth rate of any service the company covers:
“Amazon’s growth in digital video viewers is driven by three factors: the success of its Fire TV streaming devices, the roll-out of a standalone streaming video service, and its increased investment in original content, which the Boston Consulting Group estimates at $3.2 billion this year, second only to Netflix among video platforms,” said eMarketer senior analyst Paul Verna.
Competitor Netflix (NASDAQ:NFLX) still leads the pack in terms of total streaming subcribers with 120 million users, although its user growth in the U.S. has largely stalled:
“Netflix has a larger user base and therefore less room to grow, but it continues to add subscribers in the US and elsewhere thanks to the appeal of its original shows,” said Verna. “The success of these companies, and of the OTT category as a whole, indicates continued momentum for subscription-based, on-demand video.”
Meanwhile, eMarketer expects Hulu’s user base to be cut in half due to the elimination of its free ad-supported option.
Amazon shares rose $3.21 (+0.38%) to $841.30 in Tuesday morning trading. Year-to-date, AMZN has gained 24.54%, more than quadruple the return of the benchmark S&P 500 index during the same period.