What Do Amazon’s Video Streaming Gains Really Mean?

Source: Inc.
Without giving any specific numbers, Inc. (NASDAQ: AMZN) announced Tuesday morning that Amazon Instant Video tripled the number of video streams it delivered year-over-year and that it now surpasses both Hulu and Apple Inc. (NASDAQ: AAPL) in video streaming usage. The announcement comprised just 42 of the more than 500 words in Amazon’s press release.

The remainder of the release listed various programs available and the many ways that Amazon’s customers can gain access to the content through the company’s devices and program offerings. As is the company’s custom, the announcement is almost entirely fact-free.

Amazon did not discuss, for example, how much of its video streaming is being watched on mobile devices, the fastest growing sector in the streaming video universe. Because most of the company’s programming is long-form — TV programs and movies — chances are not a big share was viewed on smartphones. But how many streams are viewed on the company’s Kindle Fire tablets? Or other tablets? The company surely has this data.

The source for Amazon’s claim is a report from Qwilt, a venture-funded company that makes video caching and distribution products. A blog post at Qwilt’s website has a bit more detail. Amazon’s traffic volume increased 94% from March of 2013 to March 2014 and “in some US operator networks … Amazon’s streaming video traffic increase was nearly 300%.”

Only Netflix Inc. (NASDAQ: NFLX) and Google Inc.’s (NASDAQ: GOOG) YouTube stream more video, according to Qwilt. But how much more? According to January data from research firm comScore, Google streamed 12.6 billion videos to Amazon’s 185 million. In March of 2013, Google streamed 12.8 billion videos to Amazon’s 133 million. comScore has not published data for February or March, but it is pretty unlikely that Amazon added some 200 million streams since January. Even if it did, Google and YouTube are uncatchable and the battle is for second place.

Maybe Qwilt was counting apples and comScore is counting oranges. Both are no doubt able to count what they are looking at. But what that means for Amazon and its video streaming business is a little hard to figure out. Amazon’s new Fire TV should have a positive impact on Amazon’s numbers, but how much is sure to be a matter of interpretation.

Amazon shares were up about 2.4% in morning trading Tuesday, at $325.16 in a 52-week range of $245.75 to $408.06.