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As streaming video become a more and more crowded market, services continue to look for ways to differentiate themselves. I have been arguing that download capability may become the next big brand differentiator, and there has been some strong pushback on the idea. The purpose of this article is to update my thesis in light of new evidence, some of the first real evidence we have.

A Debate Without Data

Over the last year or so, I've been advancing the theory that download capacity will be of increasing importance to streaming video on demand providers such as Netflix (NASDAQ:NFLX) and Amazon Prime (NASDAQ:AMZN). This has always been a somewhat controversial position, but part of the problem has simply been that offline viewing is so new - even newer than streaming video itself - that there is little hard data to be found on the subject.

My anecdotal stories of those who find it very useful were matched by those whose experiences with offline viewing were either dissatisfying or just not very significant, one way or the other.

This is finally beginning to change, however, and the data that is coming in has shown that indeed, downloads have real potential to exert a substantial influence on the market.

The First Real Data I've Seen

The data on this is still limited, but companies are finally beginning to understand its importance and commission some research. One study in the UK found that downloads now constitute two-thirds of all Amazon Prime Video consumption on mobile phones. They also constitute one-third of all Prime viewing on tablets.

Meanwhile, downloads are almost nonexistent on smart TVs and streaming boxes, which are usually used in the home. In other words, downloads are being used almost exclusively on mobile devices, where data caps and throttling are far more prevalent.

Obviously, this survey measured only Prime users, which means we do not have a full sample of the market. Netflix remains the streaming leader in the UK, as it does in the US and most of the rest of the world. And Netflix was not offering downloads at the time of this survey, so a far smaller share of total streaming was composed of downloads if Netflix and other providers are thrown into the mix. Still, this survey does prove two things.

Ease Of Access

First, it demonstrates that most consumers who stream video do not find the download process too burdensome or onerous to partake of it. This has actually been a real concern among some market experts. One analyst even said over Christmas "good luck figuring out how to download things on Amazon."

I have to say I never really understood what this was about. The download button for Amazon content is directly beneath the "Watch" button on the mobile and tablet apps, and every bit as large. Anyone who can't find it just isn't looking.

Downloads on Netflix aren't much harder, with a download button located beneath the title description near the ratings and social controls. It's a little more "off to the side" than Amazon's, but hardly difficult to spot.

Still, the debate went on and analysts weren't sure. They may now put such concerns to rest. If two-thirds of mobile video watchers are now regularly downloading instead of streaming, clearly they've got the hang of it, and apparently without too much trouble.

Value And Convenience

Second, it demonstrates that the case for downloads goes beyond simple access, i.e., where you can't get a data connection. As I and some others have been arguing for some time, downloads solve problems of both access and cost. Streaming video is by far the biggest bandwidth hog in mobile data today, and consequently it makes up a large share of mobile data bills.

This leads many to simply avoid streaming video until they are on a home WiFi network. The UK survey showed that over three-quarters of those who use Amazon Prime Video do not use it on their mobile devices. Screen size and cost both probably play a role here.

The ones that do, however, have learned that the download option can help them avoid the accompanying data charges. Download on a home connection, and take the videos with you on the go. The lack of data-hogging transmissions over the mobile network, in addition to the convenience of having video available where there is no mobile network available to access, such as on the subway or an airplane, makes downloads a compelling value-add for those who take advantage of them.

Growing Implications

While this survey only pertained to Amazon Prime users when it was taken, it reveals what the market has to look forward to as download capability proliferates. After a bit of a slow start - Amazon launched offline viewing almost four years ago - Netflix, the big fish in the pond, finally joined the download ranks last winter. As has YouTube, although they charge $10 a month for the capability so there may be less conversion there.

And it is still spreading. As of last month, Showtime (NYSE:CBS) also enabled download options for its content. And Hulu CEO Mike Hopkins has now confirmed that his service, co-owned by 20th Century Fox (NASDAQ:FOX) (NASDAQ:FOXA), Disney (NYSE:DIS) and Comcast (NASDAQ:CMCSA), will look to roll out a download feature, hopefully as soon as summer. Starz has been offering downloads for over a year. HBO (NYSE:TWX) and others will probably follow in the not-too-distant future.

Continuing Development

Downloads are not a perfect solution by any means. They require some degree of advance planning, which I suppose might irritate different customers to different degrees. They usually require a memory upgrade on the device, as customers are essentially trading GBs of data bandwidth for GBs of storage.

However, these issues continue to tilt in favor of downloads as time goes on. Storage is becoming cheaper and cheaper. Apple (NASDAQ:AAPL) now makes 32 GB the standard for its iDevices, which is enough to hold roughly 15 extra hours of HD video compared to its 16 GB iPhones. Amazon charges only $20 for an extra 16 GB of storage on its Fire tablets, while saved data charges over two to three years could easily cost anywhere from ten to fifty times that.

Current Leadership

Amazon got an early start on downloads, and this is reflected in its current development compared to others. While Netflix offers only downgraded - i.e., not full HD - downloads, Amazon offers full HD.

And Amazon has also incorporated a feature called "On Deck" into its tablets which automatically extrapolates what videos you are likely to watch next based on past viewing history, and downloads them. Customer choices always have priority, but On Deck is basically Amazon's way of making sure that if there's extra space on your tablet, it doesn't go to waste. This greatly improves the utility of downloads also, since usually the inconvenience of having to download and plan ahead is one of the biggest reasons people don't take advantage of downloads.

Netflix will almost certainly develop more sophisticated download features, of course, as will other streaming video providers. But there is no doubt that Amazon has the lead right now, in a video feature of growing importance. And doubtless it too is still iterating improvements.


There is now limited but strong empirical data that downloads make a real difference to video streamers when offered. Amazon's development of such a feature several years ahead of competitors should offer it an advantage going forward as it continues to try to match Netflix and boost the appeal of its Prime ecosystem.

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