Walt Disney is undoubtedly coming off one of the best years in streaming video. As part of a launch that saw Disney+ grow from zero global subscribers to 95 million in just under 14 months, the service added about 69 million subscribers in 2020.

But one company managed to gain even more streaming viewers than Disney+ last year. Amazon (AMZN -2.56%) saw Prime Video viewership increase by 75 million in 2020, doubling to 150 million members, according to data compiled by Visual Capitalist. That massive increase in Prime Video viewers is about more than running a successful video service. It'll have a notable impact on Amazon's overall business.

A man sitting on a couch watching TV.

Image source: Getty Images.

Outpacing Disney+

Perhaps it's a bit forced to say Amazon added more viewers than Disney+ last year. After all, it had a running start, considering it already had over 150 million Prime members around the world at the start of the year. But only around half of them used the Prime Video benefit of their membership.

Meanwhile, Disney was building a new streaming service and brand from scratch. After launching in November 2019, it ended that year with 26.5 million subscribers, and reached 95 million by the start of 2021. There were a few million Hotstar subscribers Disney converted to Disney+ Hotstar subscribers in April, but for the most part it's all organic growth.

It's also worth noting that Disney provides accurate numbers, whereas the increase from 75 million Prime Video viewers to 150 million in 2020 is just an estimate. Amazon doesn't give exact details about Prime (or most other things, for that matter).

What we do know for certain is Amazon invested a lot in content last year. Video and music content expense increased to $11 billion in 2020, up from $7.8 billion in 2019. By comparison, Disney spent $2 billion on Disney+ content last year. While Amazon's expense item includes music content, as well as content expenses for video-on-demand rentals and purchases, it's likely the vast majority goes toward Prime Video.

The increased content investment combined with the secular trend toward streaming video accelerated by the COVID-19 pandemic and Prime Video's existing global availability meant a lot of people checking out what's available. CFO Brian Olsavsky mentioned more Prime members used their digital benefits more frequently during earnings calls throughout 2020.

Why increasing Prime Video viewership is so valuable

Engagement with Prime Video and the other digital benefits of Prime has historically been a leading indicator of customer retention for Amazon. Management has said trial members who use Prime Video are more likely to become paid members, and paid members that use Prime Video are more likely to resubscribe.

During Amazon's fourth-quarter earnings call last month, Olsavsky postulated increased engagement on Prime Video actually leads to more shopping on Amazon's online marketplace. "There is also a lot of people who engaged more strongly with Prime benefits in 2020, and we think that will have a lasting impact both from the purchase frequency amount they purchase," Olsavsky told analysts.

So, while doubling Prime Video viewers in 2020 may not have led to much increase in direct revenue for Amazon last year, the indirect benefits are substantial. Prime memberships account for the vast majority of Amazon's subscription revenue, which increased 31% last year. And online store revenue grew even faster, up nearly 40% in 2020.

While Prime Video may not have been the main reason why subscription services and online store revenue increased so much last year, it could be a big reason why both remain elevated and continue to grow for the FAANG stock post-COVID-19.