Amazon vs. Netflix in the Paid Alternative TV Wars

New research from 451 Research's ChangeWave service shows that the Instant Video offering from Amazon.com Inc. (NASDAQ: AMZN) continues to gain share among consumers. Netflix Inc. (NASDAQ: NFLX) still dominates the market for "alternative TV" with 82% share, but that's down 2 points from the previous ChangeWave survey in February 2012. iTunes from Apple Inc. (NASDAQ: AAPL) holds a 16% share and Hulu Plus gets 8%. Amazon Instant Video nabs 22% of the market, up 5 points from the February survey.

ChangeWave notes that Netflix's loss of its exclusive rights to online movie distribution channel EPIX (to Amazon) led 17% of Netflix subscribers to say the loss is 'more likely' to make them cancel their subscriptions to Netflix.

Making matters worse for Netflix, 18% of subscribers already pay for Amazon Instant Video, up from 14% in February. Amazon trails Netflix by a single point in customer satisfaction, 23% to 22%, but both trail Apple which boasts a 35% 'very satisfied' rating.

The top choice for a device on which to watch streaming video is the iPad, up 7% to 32% since February. Blu-ray players are the choice of 31% (down 2 points) and iPhones are the choice of 25% (up 5%). Internet-connected video game consoles are used by 24% (down 1%), while Apple TV and Roku TV get 13% each, both up 4%. Google TV and various Android-powered devices from Google Inc. (NASDAQ: GOOG) didn't make the cut.

The battle for control of consumers' living rooms, not just their TV sets, is just getting started in earnest. Apple has a clear lead in hardware, but the don't count out network TV and cable channels. They own most of the content and can drive a pretty hard bargain. It's still early days.

Paul Ausick

Filed under: 24/7 Wall St. Wire, Entertainment, Internet, Media, TV Tagged: AAPL, AMZN, featured, GOOG, NFLX