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Broadband and Mobility

Sprint Partners with Amazon to Offer Amazon Prime to Customers: Parks Associates Insights

With growing adoption of bigger screen smartphones and LTE-enabled tablets, American consumers are spending more time for entertainment on mobile platforms than ever. According to recent Parks Associates research, 68% of U.S. smartphone owners listen to streaming music daily, while 71% watch short video clips.

Last week, Sprint announced a new partnership with Amazon, allowing current and future customers to add Amazon Prime and its services as an add-on to monthly plans. For an additional $10.99 per month, Sprint customers will gain access to Prime Video, Prime Music, Kindle Owners’ Lending Library, Amazon’s free two-day shipping, and more.

This exclusive partnership between Sprint and Amazon Prime can be a win-win for both parties. Sprint customers now have a low-cost option to enjoy all Amazon Prime benefits, whereas Amazon gains a new channel of attracting Prime members.

Parks Associates research shows that Amazon Prime is currently the most popular paid music subscription service among U.S. broadband households. Sprint customers also rank among the top consumers who listen to streaming music on a smartphone at least once a day, according to the firm’s consumer data.

Additional research shows:

  • Smartphone owners spend an average of 28 minutes per day playing games on their mobile device.
  • 40% of smartphone owners watch longer video clips such as TV or movies at least once per day.
  • 45% of iPhone owners watch movies or TV shows on their phones daily; 40% of Samsung phone owners watch these longer video clips on their device at least once per day.

Sprint’s new move reflects a diverging trend in mobile operators’ data plan strategy, says Harry Wang, Parks Associates’ Director of Health and Mobile Product Research. For operators with limited access to content, bundling attractive OTT content and unique offerings with mobile data services are the preferred method to attract new users or retain existing customers. Larger operators with their own content license deals, such as Verizon and AT&T, will offer their own OTT content services directly to consumers.

Verizon, in particular, is aggressive with its content acquisition and ad-supported OTT media initiatives. Its Go90 mobile OTT video service targets not only its own subscribers but also all mobile users, although Verizon subscribers enjoy the benefit of Go90 data consumption not counting into their monthly quota. With its rumored bid for Yahoo’s Web assets, Verizon is taking a quite different route than other major operators in the U.S.

Sprint may benefit more from the partnership than Amazon does on subscriber gain and churn reduction, but Amazon may have a more favorable revenue-sharing arrangement. If Amazon finds such a partnership beneficial, it may seek operator channel support through similar deals in other countries to boost Amazon Prime adoption.

Parks Associates analysts are available to comment on this announcement. For more information or to schedule a briefing or interview, contact Holly Sprague.

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