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Netflix's share of U.S. online movie revenue skyrocketed to 44 percent in 2011

When it comes to the U.S. online movie business, Netflix pushed Apple aside for top revenue in 2011.

IHS released its IHS Screen Digest Broadband Media Market Insight Report, showing that Netflix's subscription video on demand (SVOD) service surpassed Apple's iTunes, which is a transactional video on demand (VOD) service, in 2011.

According to IHS' report, Netflix's share of U.S. online movie revenue skyrocketed to 44 percent in 2011. This is a significant jump from Netflix's share in 2010, which was less than 1 percent.

Apple, on the other hand, had its total revenue drop to 32.3 percent in 2011. This was a pretty big decrease from 60.8 percent in 2010.

"We're in the midst of a significant change in the way people pay to consume movies online," said Dan Cryan, research director for digital media at IHS. "All the significant revenue in the U.S. online movie business in 2011 was generated by rental business models, which provide temporary access, not permanent ownership. Rental delivers unlimited consumption with a low monthly fee for older titles as well as cheap rentals of new releases, providing the kind of value that online customers want. In contrast, EST, which is much more profitable for studios on a per-transaction basis, is stuck in the doldrums."

Despite the fact that Netflix and Apple both represent different ends of the market and offer different products (SVOD services tend to have older titles while transaction VOD services have newer titles as well as older titles), they share a common interest in hardware. Netflix is available on various devices like game consoles, smartphones, tablets, etc. ITunes is also available on many devices, but mainly benefits Apple by being the proprietary media player program for Apple products.

The report also showed that all U.S. transactional VOD revenue grew 75 percent from $155 million in 2010 to $273 million in 2011. SVOD revenue far surpassed this number, hitting $454 million in 2011 from only $4.3 million in 2010. This put SVOD in the lead, and with Netflix being the king of SVOD services, Apple was knocked down a peg.

Source: IHS Media Relations

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RE: Limped in
By nolisi on 6/3/2012 2:43:16 AM , Rating: 2
Apple is not, and never has been, interested in lists of specs. They are interested in crafting a coherent user experience which some (not all) people will pay good money for.

Great point- the problem is that Apple entered a market where differentiation just makes thing a bit superfluous.

UI designs have been simplified (and perhaps oversimplified) for the average user for ages in the set top market. Even Microsoft beat Apple TV to market with a solidly designed, enhanceable WMC interface that integrates devices including PS3.

There was nothing for an Apple experience to contribute except for iTunes and perhaps connectivity with Apple devices; and iTunes can be put on any PC, while the demand for Apple devices in any serious home theater setup is extremely understated as they don't appeal to the theater geeks who are interested in a list of specs.

Where Apple usually opts to be the center of the experience in a market (iPhone, iPad, iPod), the Apple TV is really a sad tertiary device. In this case, had they designed a receiver, they might have done better.

RE: Limped in
By messele on 6/3/2012 6:55:23 AM , Rating: 2
Are you talking about features in software or hardware though? I don't want to spend hours faffing about with clever media centre settings, I just want to find stuff that I'd like to watch and watch it without hassle.

On that basis there is little to choose between the devices out there until you add extra features such as integration on top and the Apples solutions come out on top for me personally as I just can't be bothered to mess around getting things working anymore like I used to.

"This week I got an iPhone. This weekend I got four chargers so I can keep it charged everywhere I go and a land line so I can actually make phone calls." -- Facebook CEO Mark Zuckerberg

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