Apple trumps Sony, Wal-Mart in online film download war
Wednesday 09 February 2011
Apple is not the first company that springs to mind when you think of the top online movie retailer in the US, but the technology giant currently accounts for more than two-thirds of the US market for electronic sell through (EST) and internet video on demand (iVOD) movie consumer spending.
Apple's iTunes has become the go-to digital media store for consumers wanting to purchase download-to-own videos in the US, says new research by IHS Screen Digest for iSuppli.
While Apple remains top dog in iVOD, its market share has eroded from 74.4 percent in 2009 to 64.5 percent in 2010.
iSuppli attributes Apple's slight decline in market share to the swarm of new competitors fighting to get their hands on a piece of the iVOD market - a market which has seen its revenue rise by more than 60 percent over the last year.
"The iTunes online store showed remarkable competitive resilience last year in the U.S. EST/iVOD movie business," said Arash Amel, research director, digital media, for IHS, adding that the company staved off "a growing field of tough challengers while keeping pace with a dramatic expansion for the overall market."
"Apple faced serious competition from Microsoft's Zune Video and Sony Corp.'s PlayStation Store, as well as from Amazon and - most significantly - Wal-Mart. However, iTunes managed to grow because of the introductions of the iPad and the second-generation Apple TV, which have spurred the company's movie rental offerings and have invigorated the iTunes multi-screen ecosystem. We expect that in the United States, Apple's strong performance in iVOD will allow it to continue to bypass the video on demand services offered by many major cable operators."
Both Microsoft and Sony are desperately trying to lodge their foot in the iVOD door with their respective Zune Video and PlayStation Stores, but in the future, Wal-Mart's Vudu service may prove to be the most fearsome rival for iTunes.
"The future of the online movie business may come down to competitive battle between Apple and Wal-Mart," commented Amel.
"Although Wal-Mart is not on the charts yet, the company soon will become a major player if its current momentum continues. The company already represents a critical source of revenue for the major Hollywood studios because of its massive sales of Blu-ray and DVD movies - and now is expanding this business into the online realm."
A second report on the US online video market in 2010, released on February 7 by market researcher comScore, shows that an average of 197 million Americans watch videos online every month.
Online video platform Hulu was the top online TV viewing commodity in the US and accounted for 323 million hours of online TV viewing in the fourth quarter of 2010 - more than twice as much as the combined total for the top five major broadcast network sites.
US movie electronic sell through and internet video on demand movie market share ranking in 2010:
1. Apple - 64.5%
2. Microsoft - 17.9%
3. Sony - 7.2%
Others - 10.4%
iSuppli's Screen Digest EST/iVOD Research Quarterly Update Analysis was published on February 7 and is available for your perusal here: http://www.isuppli.com/Media-Research/News/Pages/Apple-iTunes-Remains-Dominant-in-US-Online-Movies-in-2010-Despite-Competitors-Inroads.aspx
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