Amazon’s Prime Instant Video service, previously Lovefilm Instant, has dropped subscribers in the last six months from eight per cent of UK online users to six per cent, according to Decipher’s bi-annual media consumption tracker, Media Bug.
In contrast, Netflix membership is growing alongside user loyalty to the online video service, with figures showing a membership growth in the last six months of 10 per cent to 14 per cent of UK online users now with a subscription.
In addition, more new subscribers are signing up with the intention of continuing subscriptions after the free trial period ends. The report showed that the number of people signing up only for the free trial has dropped in the last six months from 39 per cent to a quarter of all subscribers.
The drop in subscribers to the Amazon service comes just two months after the Lovefilm Instant service re-branded and became part of Amazon Prime.
The study also showed that Sky’s Now TV service is growing in popularity and now takes three per cent of the online subscriber market, while Sky On Demand has the largest share of share of the market in TV Video On Demand, covering almost a quarter of the market through its library and expansion of broadband connected set top boxes.
Dr Hamish McPharlin, director of Decipher Media Research, said: “These findings really show that the battle for dominance in the Video On Demand space has reached fever pitch.
“While Netflix is ahead in the online arena, and Sky leads on the TV, the volume of new entrants end up pulling audiences in all directions. The intensity will have to abate at some stage, and in the end, it is the vendors that can provide the best content and the most elegant integration with existing devices and services that will prevail.”
In terms of technology, tablets have overtaken smartphones as the preferred device for watching video, while new devices from Sky and Google – the Now TV box and Google Chromecast dongle – are set to make the market even more competitive.