CFDs are a leveraged product and can result in losses that exceed deposits. Trading CFDs may not be suitable for everyone, so please ensure you fully understand the risks and take care to manage your exposure.

Netflix vs Amazon Prime: a history of streaming

Netflix and Amazon Prime are fiercely competitive, offering rival subscription video-on-demand (SVOD) services. Discover their history – and how streaming has affected both companies’ share prices – here.

Netflix and Amazon Prime key info

Company Netflix Inc (NFLX) Inc (AMZN)
Founded 1997 1994

Reed Hastings

Marc Randolph
Jeff Bezos
Headquarters Los Gatos, California Seattle, Washington
Stock exchange NASDAQ NASDAQ


Netflix vs Amazon Prime: a brief history

Amazon was incorporated in 1994 and began selling books online the following year, while Netflix started life as a DVD-by-mail rental service in 1997. 

Both companies expanded rapidly. Amazon held an initial public offering (IPO) in 1997, listing the company at $18 a share for a market capitalisation of $438 million, while Netflix followed in 2002 at $15 a share and a market capitalisation of $309 million.

By the end of 2005 Amazon’s shares were trading at $47 (after three stock splits) as it had added new product categories,1 launched internationally, and introduced its ‘Prime’ service to provide subscribers with free delivery. Meanwhile, Netflix shares were trading at $27 (following a stock split) as it had grown to 4.2 million subscribers.1

First forays into digital video

The next few years saw both Netflix and Amazon push online video. In 2006, Amazon launched a digital video download service called Amazon Unbox (later rebranded as Amazon Video),2 while Netflix introduced streaming for its subscribers in 2007.

Netflix quickly expanded its offering, launching streaming-only services in Canada, Latin America, the UK, Ireland and Nordic countries in 2010. By the end of 2012 it was in 40 countries and had over 33 million subscribers for its streaming service alone.

Meanwhile, Amazon was beginning to show its intent to compete directly with Netflix. In 2011, it launched Prime Instant Video – bundled with Prime in the US – and purchased LoveFilm, a DVD-by-mail and video-on-demand (VOD) streaming provider with a presence in the UK, Germany, Sweden, Denmark and Norway.

The expansion of both companies pushed share prices higher. Netflix shares were trading at $92 by the end of 2012,1 while Amazon shares had reached $251.

Netflix stumbles

In 2011, Netflix decided to separate its DVD-by-mail and streaming services, with the former being rebranded under a new umbrella: Qwikster. Though this rebrand was quickly reversed, Netflix continued to enforce a new policy whereby customers wishing to use both its services would now require two separate subscriptions.

The company lost 800,000 subscribers as a result of the debacle, with its share price falling from $272 in June 2011 to $71 by the end of the year.1 However, the incident was the clearest statement yet that Netflix saw the future of its business in streaming.

Original content and global expansion

Around this time, both Amazon and Netflix began to branch out into producing original content. The first Netflix Originals show – ‘House of Cards’ – streamed in February 2013, followed by the first Amazon Studios shows in April 2013.

Since then, both firms have continued to invest heavily in original content. Popular Netflix Originals include ‘Orange Is The New Black’ and ‘Stranger Things,’ while Amazon has produced hits including ‘The Grand Tour’ and ‘The Man In The High Castle.’

Streaming goes global, DVD rentals decline

Following expansion into a limited number of new territories between 2013 and 2015, both companies finally went global in 2016. Amazon’s rebranded service – Amazon Prime Video – became available in over 200 countries, while Netflix became available everywhere except China, Syria, North Korea and Crimea. Netflix also signed a deal with iQiYi, allowing it to distribute its original content in China, in 2017.

By this time, DVD-by-mail subscribers were on the decline. Amazon took the decision to shut LoveFilm for good in 2017, while Netflix quietly rebranded its service as, a Netflix company, in 2016. It continues to operate with over 3.5 million subscribers (end of Q3 2017).

Amazon stock went from $257 at the start of 2013 to $1169 by the end of 2017, while Netflix shares rose from $92 to $192 over the same period (following a stock split in 2015).1

Netflix and Amazon Prime today

Today, both Amazon and Netflix continue to invest heavily in original programming to secure market share, reinvesting profits and increasing debt levels to fund content production. For example, Netflix spent $6 billion on content in 2016 – while announcing that it expected its content budget to rise –  and Amazon is estimated to have spent $4.5 billion in 2017 (according to analysis by JPMorgan) with no signs of slowing down. 

The reason for this heavy investment is that both Netflix and Amazon Prime Video need their own intellectual property (IP) to protect against new entrants, particularly cash-rich tech firms such as Facebook, Google and Apple, which have the potential to outbid them for popular titles. Existing studios and networks also pose a threat as they control extensive back catalogues, and could launch rival services. Netflix appears particularly exposed as it has few alternative revenue streams compared to Amazon Prime, which offers a range of bundled services in many territories.

Netflix vs Amazon Prime: timeline


Netflix founded as DVD-by-mail rental service


Netflix changes to subscription model


Netflix introduces streaming

Netflix rebrands its DVD-by-mail business as Qwikster. Reverses the decision soon after

First Netflix Original shows air

Netflix goes global

Netflix has 109 million streaming subscribers


Amazon founded


Amazon Prime launched in US

Amazon Prime goes international

Amazon Prime Instant Video introduced

First Amazon Studios shows air

Amazon Prime Video goes global

Amazon has an estimated 90 million Prime members in the US alone (JPMorgan)

Could Netflix’s market cap ever overtake Amazon’s?

At the end of 2017, Netflix had a market capitalisation of just over $80 billion, compared to $550 billion for Amazon. This is probably because Amazon has significantly higher revenues than Netflix, and operates in many spaces where its rival does not compete.

It therefore seems unlikely that Netflix will overtake Amazon in terms of market capitalisation, unless it can diversify its offering significantly.

What is Netflix and Amazon Prime’s share of the market?

Netflix has more than 109 million streaming subscribers globally, while Amazon Prime is likely to have many more, given that it is estimated to have 90 million members in the US alone (according to Consumer Intelligence Research Partners, October 2017).

Despite this, Netflix appears to be the frontrunner in terms of streaming, as it is likely that fewer Amazon Prime members engage with Prime Video, with many joining for the other bundled services.

How to trade Netflix and Amazon with IG

With IG, you can trade on shares price movements. 

Trading Netflix and Amazon

  • Speculate on movements in Amazon and Netflix share prices with CFDs
  • You don’t own the underlying shares, so do not receive voting rights or dividends
  • Leverage allows you to open a trade by paying a deposit worth only a fraction of the total position
  • Losses can exceed deposits
  • Go long or short 

Three things to know before you start trading Netflix or Amazon

  1. Currency conversion fees

Currency conversion fees will apply to customers buying Netflix and Amazon shares outside of the US. At IG, our currency conversion fee is just 0.3%, and all US shares are listed in dollars, so you know exactly what you’re paying.

  1. You don’t have to trade the companies themselves

Both Amazon and Netflix have relationships with other companies. Amazon for instance uses FedEx and UPS delivery services, so their share prices can be affected by what Amazon does. Similarly, Netflix has used Amazon Web Services (AWS) to host a good chunk of its data and services since 2016, so Amazon’s share price could be affected by a change in this relationship.

  1. Don’t focus solely on streaming

Netflix continues to offer DVDs-by-mail in the US, while Amazon offers a wide range of additional products and services including the Amazon Echo, Kindle and Fire. Pay attention to how each companies’ other products and services are performing. 

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1 Prices calculated using stock-split adjusted IG data. Amazon had a 2:1 split in June 1998, a 3:1 split in January 1999, and a 2:1 split in September 1999. Netflix had a 2:1 split in February 2004, and a 7:1 split in July 2015.

2 At launch in 2006, the service was called Amazon Unbox. However, it has been rebranded several times since then – first as Amazon Video On Demand (2008), then as Amazon Instant Video (2011), and finally as Amazon Video (2015). Prime Video exists as part of Amazon Video, though it requires a separate subscription.

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CFDs are a leveraged product and can result in losses that exceed deposits. Trading CFDs may not be suitable for everyone, so please ensure you fully understand the risks and take care to manage your exposure.