Parks Associates: Amazon Prime Video U.S. Penetration Hits 45 Percent

New consumer research from Parks Associates has found that as of Q3 2021, Amazon Prime Video’s subscriber penetration rate is at 45 percent of U.S. internet households.

Parks Associates estimates that in the first quarter of 2021, 77.3 million U.S. households were members of Amazon Prime and that around 71 percent of them watched Prime Video.

The firm bills Amazon Prime Video as one of the four “foundations of the consumer streaming stack,” along with Netflix, Disney+ and Hulu.

Amazon Prime Video 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, encourage new subscribers and lure in cord-cutters and service hoppers.

“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,” said Eric Sorensen, senior contributing analyst at Parks Associates. “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.”

“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,” Sorensen said. “Supply chain and increasing shipping expenses are being passed down to customers, but it is doubtful that Prime members will object to a 20-dollar-a-year membership rise, the first in four years.”