Survey: 32% of Netflix Subs Would Switch to Amazon Prime

25 Feb, 2011 By: Erik Gruenwedel

Amazon’s launch of a movie streaming service through its Prime loyalty program could prove problematic to Netflix, according to a new report.

Amazon Feb. 22 said it would offer streaming of 5,000 titles at no extra charge to its $79 annual Prime program, which, when prorated more than 12 months, is $1.40 per month cheaper than Netflix.

In the prescient survey conducted prior to Amazon’s announcement, The Diffusion Group found that 32% of respondents who are Netflix subscribers would sign up for Prime and cancel Netflix if the service was comparable. Another 30% said they were uncertain, 27.5% said they would not switch and 10% said they would use both services.

Among Netflix subscribers with Prime loyalty memberships, the percentage willing to switch increased to 36.2%, while 32.6% said they would use both services, 9.8% said they would stick with Netflix and 21.5% said they were uncertain.

The wide-reaching video behavior survey of 2,000 Internet-connected households included just two questions regarding Amazon and Netflix, with 534 respondents.

Regardless, the results underscore the fact that Amazon and Netflix cater to the same demographic. In fact, 88% of Netflix members also shop at Amazon but only 18% currently are Prime members. Another 43% of Netflix members/Amazon shoppers said they were familiar with Prime, while 27% said they had never heard of it.

Michael Greeson, founding partner with TDG, in a post said the results portend a potential groundswell for Prime streaming at Netflix’s expense. He said that while Netflix streaming offers more than twice the content of Prime, it is easier to use and available on more than 200 consumer electronics devices, but does not make it immune to the ecommerce behemoth.

“Amazon is not Redbox, and the upside potential of this new streaming service will go far beyond this initial ‘Netflix Lite’ offering,” Greeson .