Amazon tops Netflix as biggest subscription streamer in U.S.

For the first time in four years, the domestic streaming market has a new king.

Amazon Prime Video overtook Netflix as the most-subscribed to streaming service in the United States, according to new data released by market research firm Parks Associates on Friday.

In a statement, a top executive with Parks Associates suggested recent turbulence that saw Netflix shed subscribers over the course of two consecutive financial quarters this year likely contributed to Amazon Prime Video's rise among subscription streaming services.

"Streaming services are introducing new content, services, and partnerships that are changing how consumers interact with video," Jennifer Kent, the vice president of research at Parks Associates, said. "It also gives Netflix a path to creating unique accounts for those who have been content to share passwords with friends and family in the past. It's an exciting time to track these services, with lots of disruption and change."

Netflix lost around 1.2 million more subscribers than it gained during its first two financial quarters this year. A mixture of rising subscription prices at Netflix and an increase in domestic competition were seen as factors in the subscriber drop, though Netflix has blamed a number of other trends, including a loss of top-tier content to other services and password sharing among some customers.

The subscriber loss was somewhat reversed during Netflix's most-recent financial quarter, when the company reported it added 2.4 million customers. Nearly all the new customers came from overseas, according to its earnings report; it continued to lose customers in the United States.

Under pressure from investors, Netflix recently introduced an ad-supported tier that brings the price of the service down to around $7 per month — about what Netflix charged for streaming access when it was split off from its DVD-by-mail service a decade ago.

While Netflix has worked to reorient its business, Amazon has moved to increase the amount of content offered on its Prime Video service. In March, Amazon closed on an $8.5 billion deal to acquire MGM studios and its content library. The deal also includes the premium cable movie network Epix (to be renamed MGM Plus next year); some Epix content has already started to appear in Prime Video.

Amazon also forged a pact with the National Football League to become the exclusive home of most Thursday Night Football games, save for two that are broadcast on NBC during the year. Starting next year, Amazon will also offer a "Black Friday" football game in partnership with the NFL.

Amazon Prime Video is offered as a value-add to customers who subscribe to Amazon's Prime membership program, though a separate Prime Video-only subscription is also available. This year, Amazon said it had more than 200 million global Amazon Prime members, nearly all of whom receive Amazon Prime Video for free. Around three-quarters of those subscribers are based in the United States, according to some estimates.

Until recently, Netflix and Amazon licensed the bulk of its content libraries from other distributors and studios. Over the last few years, that strategy has shifted toward developing original programming that is exclusive to each service, with mixed results.

At the same time, media companies like Paramount Global, the Walt Disney Company and Warner Bros Discovery have reclaimed digital distribution rights to popular and familiar TV shows and movies as those brands seek to beef up their own direct-to-consumer subscription services.

After paying more than $100 million to keep the Warner Bros show "Friends" on Netflix for about a year, the streaming service finally lost the show to HBO Max in 2020. That year, HBO Max debuted as the sixth most-subscribed to streaming service in the United States, according to Parks Associates. This year, it moved up one spot.

Park Associates OTT Video tracker _ December 2022

Peacock, a streaming service launched by Comcast two years ago, was ranked in the top 10 streaming services by Parks Associates' OTT Video Market Tracker for the first year. The streaming service ranks ninth overall.

Disney's general entertainment service Hulu and its family-oriented streamer Disney+ ranked third and fourth, respectively, while its sports-centric ESPN+ was sixth on the list. Paramount Plus seventh, while its sister streamer Showtime was knocked off the list completely.

Apple TV+ was in eighth place among subscription streaming services, a position that was unchanged from last year. Starz moved down to 10th place.

Parks Associates says it will offer more information about its report during the Future of Video conference on December 12.