Amazon.com's (NASDAQ:AMZN) Fire TV service boasts "well over" 30 million active users, the company said at the 2019 Consumer Electronics Show in Las Vegas this week, according to CNET. The figure is impressively higher than the 27 million active accounts Roku (NASDAQ:ROKU) said it had earlier this week.
At 30 million active users strong, this bodes well for Amazon's streaming-TV efforts, which include set-top box hardware, a streaming-TV platform, and Amazon's own streaming Prime Video service. In addition, by passing up Roku, a major streaming-TV platform company, Amazon further fortifies its place among the world's most popular streaming-TV platforms.
A fast-growing business
Amazon's update on its active users shows how rapidly the company's Fire TV platform is growing. When Amazon launched its new Fire TV Stick 4K on Oct. 3, the company said 25 million people were actively using its Fire TV devices. That means Amazon added at least 5 million users in just over three months. In addition, Amazon's Fire TV lead, Marc Whitten, told CNET that Amazon was "still in the middle of the 'buy' to 'turn on' period" following the holidays, suggesting there's more strong growth ahead.
It's no secret that streaming-TV platforms are seeing strong growth. A tailwind from a growing number of consumers shifting their TV consumption to connected TV has driven huge growth at Roku and Netflix (NASDAQ:NFLX) recently.
Roku's active accounts in its fourth quarter of 2018 surpassed 27 million, up an impressive 40% year over year. Streaming hours during the period hit an estimated 7.3 billion, up 68% year over year. That brought total streaming hours in 2018 to about 24 billion.
At Netflix, the streaming-TV giant boasted 137.1 million members in its most recently reported quarter, up 25% from the year-ago period. This strong growth in members helped Netflix's revenue rise 36% year over year during the quarter.
Helping Amazon's advertising arm
Just as is the case for Roku, the bigger story for Amazon's growth in active Fire TV users is not the device sales, but rather the potential for monetizing these users. Namely, strong growth in active Fire TV users can help boost Amazon's nascent and fast-growing advertising business.
Connected TV ads are exploding recently as the fast-growing medium attracts a growing portion of the large budgets marketers have for traditional television ads. Highlighting uncanny growth trends in marketer spend on connected TV ads, consider that programmatic ad-buying platform The Trade Desk (NASDAQ:TTD) saw a tenfold year-over-year increase in spending for connected TV ads on its platform in Q3.
"Advertisers have only just started to move budget over from Linear TV," said The Trade Desk CEO Jeff Green in the company's third-quarter earnings call, "which is why Connected TV will possibly be the most important channel for our company's growth in 2019 and beyond."
A healthy connected TV platform for Amazon could help drive significant advertising revenue growth for the company, just as it has been doing for Roku.
John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Daniel Sparks owns shares of Amazon, Netflix, and The Trade Desk. The Motley Fool owns shares of and recommends Amazon, Netflix, and The Trade Desk. The Motley Fool has a disclosure policy.