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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 Mitch101 on 6/3/2012 10:09:01 AM , Rating: 4
All of these devices in my home have Netflix and other various streaming services.

Wii, X-Box 360, Sony BLU-RAY player, LG BLU-RAY player, Toshiba HDTV.

Practically every BLU-RAY player I see has Netflix and more built in and your going to buy a BLU-RAY player for your HDTV. Just like many people bought a PS3 because of the BLU-RAY ability now the PS3 has movie streaming services.

The question is why would I give Apple $99.00 just add their streaming service?

I think they should make it a channel like Netflix, Hulu, Crackle, and Amazon and let it get incorporated into other devices. This would increase their user base and if you want some additional functionality that the Apple device offers then you might commit to the $99.00 device they offer. Most people just want to play the movie and I see no reason to give Apple $99.00 to add their streaming service which is just one more streaming service to the dozens I already have access to because they are built into the devices I purchased. Its a waste of another input.

RE: Limped in
By GotThumbs on 6/4/2012 12:15:01 PM , Rating: 2
Apple does NOT like to share equal playing field.

Apples solution will be to sell applefans an Apple branded smart tv that has the internals of the Apple TV device.

RE: Limped in
By Mitch101 on 6/4/2012 2:00:16 PM , Rating: 2
Probably but Microsoft just dropped a ton of enhancements to the X-Box 360 including Music Service, Tablet Streaming and controlling, 4 ESPN channels including Monday Night Football, NBA, and a ton of other enhancements. With 67 Million X-Box 360's out there and a low price tag its hard to choose Apple TV over a 360.

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