BUSINESS

AP Explains: Amazon Prime Instant Video and the surge of streaming video

01/15/2015 03:17 EST | Updated 03/17/2015 05:59 EDT
NEW YORK, N.Y. - Online retailer Amazon.com's Prime Instant Video made history this week when its show "Transparent" won a Golden Globe for best comedy TV series, a first for a web-only production. Amazon Studios then announced that it had hired Woody Allen to create his first-ever TV series. So what is Amazon Prime Instant Video? It competes with Netflix, Hulu, Yahoo Screen and others by streaming a mix of original content and reams of movies and TV shows. Here's a brief look at the rise of Amazon Prime Instant Video and other streaming services:

THE STREAM

More Americans are watching TV by streaming video on PCs, tablets and phones or via set-top boxes like Amazon Fire TV, Apple TV or Roku. Netflix is the leading paid streaming service, with about 53 million subscribers worldwide, including 38 million in the U.S. Amazon is second, with an estimated 24 million Prime subscribers using its video service, compared to Hulu's 6 million paid subscribers, according to Forrester Research. Amazon offers original programming like "Transparent," which stars Jeffrey Tambor as a transgender parent to three grown children, and thousands of other TV shows and movies, including older HBO programs like "Six Feet Under" and "The Sopranos." The service is available mainly to Prime members in the U.S., U.K., Germany, Austria and Japan.

PRIMING VIEWERS

Amazon Prime Instant Video is available for free for members of Amazon's $99 annual Prime program. The Seattle company's longtime strategy has been to invest in services for its Prime members to grow its membership base, because members generally spend more. Services like free two-day shipping and discounts on grocery and same-day delivery have helped attract an estimated 40 million Prime members (the company does not disclose the total figure). Amazon said it gained 10 million more subscribers over the December holiday period.

CONTENT IS KING

Amazon Studios original content is an increasingly important but still relatively small part of the streaming service. "Transparent" has been its most high-profile series, but it has also debuted "Mozart in the Jungle," which stars Gael Garcia Bernal as a classic music conductor. The success of "Transparent," along with Netflix shows like "House of Cards" and "Orange is the New Black," have proven that viewers will watch original content on streaming services. Amazon Studios, which began producing original programing in 2010, has also begun offering viewers a chance to vote on pilots to determine which shows it develops. The latest batch, which began streaming Thursday, includes pilots of 13 original comedy, drama, documentary and kids shows.