The number of Amazon Prime Video subscribers more than doubled in the UK last year, according to new figures from Ofcom.
The regulator’s latest international analysis of the TV market highlights the ongoing growth of on-demand streaming both in British living rooms and further afield.
Pay-TV has been growing in most countries, including the UK, with the majority of households in the UK having a pay-TV subscription (58 per cent). Live broadcast viewing also remains the way in which most television is watched in the UK (86 per cent.
However, time-shifted viewing is also on the up (14 per cent), thanks to the popularity of catch-up and on-demand services. Indeed, the UK has the highest use of free-to-air broadcaster catch-up services of all the countries compared by Ofcom – 56 per cent of respondents said they use services such as BBC iPlayer and All4.
With 83 per cent of internet users using a smartphone and 31 per cent owning a smart TV, improved connectivity and accessibility is helping to drive take-up of free and paid on-demand and streaming services. Usage of SVOD (subscription VOD) services has risen 12 percentage point since 2015 to 41 per cent (behind the USA on 84 per cent), with just under a quarter of UK respondents preferring SVOD as a cheaper alternative to pay-TV.
More than half of British respondents (52 per cent) say that original content is their main reason for signing up to an SVOD service – and it is here that Amazon has been making its major strides in its ongoing rivalry with Netflix. US productions make up 81 per cent of all the hours on Amazon, and 66 per cent on Netflix. UK productions come second on both platforms, making up almost a fifth of productions on Netflix and just over a tenth on Amazon.
Indeed, localisation is increasingly important to SVOD services – Amazon has more than twice as many subscribers as Netflix in Germany, perhaps due to its early introduction of localised content (Amazon’s first German-language original You Are Wanted began streaming on Amazon in March, ahead of Netflix’s first German series, Dark, which arrived this month).
One of Amazon’s key UK investments is, of course, The Grand Tour, featuring the former Top Gear trio of Jeremy Clarkson, Richard Hammond and James May. In 2015, the year in which Amazon announced its deal with the Grand Tour line-up, Amazon’s content spend increased by 55 per cent year on year in nominal terms. Although exact figures are unknown, Season 1 of The Grand Tour, which debuted in November 2016, was estimated to have cost between $160m and $250m (£118m to £185m) to produce. (Netflix’s content spend has also been increasing YoY, by 9 per cent in nominal terms between 2012 and 2013, and by 25 per cent between 2015 and 2016.)
Ofcom therefore attributes the ensuing doubling of UK subscribers at least partly to The Grand Tour’s popularity. With Amazon continuing to splash big on productions, including a new Lord of the Rings show, that trend may well continue in the future. Indeed, UK broadcaster spend on content (£8bn) and first-run original content (£3.5bn) this year was the highest among all European comparator countries, although it’s behind US broadcaster spend of £40bn total and £16bn for original content.