Home » Music, movies, TV

As iTunes movie revenue grows, Netflix skyrockets

2 June 2012 2,047 views 5 Comments

increasingly only netflix, iTunes and redbox matter in the movie rental and VOD space.

In 2011, Netflix and CEO Reed Hastings made a number of missteps that really ticked off customers. There was an uproar over Hasting’s attempt to split the online and mail-order portions of the business and indignation following a big price increase. All of that angst and anger hurt their market position, right?

You can’t see any affect in the IHS market data movie industry magazine Variety just published. Over the course of 2011, Netflix increased its share of money spent on movie downloads by 10,000 percent, from less than 1 percent of the market to 44 percent.

iTunes, which started 2011 in the catbird seat with 61 percent of movie download revenues, saw its share plummet to just 32 percent.

So, Apple just suffered a major ass kicking, right? Yes and no.

Netflix’ digital business model is 100 percent subscription video on demand (SVOD) and Apple doesn’t offer a competing product. In the transactional video on demand segment (TVOD), where Netflix doesn’t complete directly, revenue increased 75 percent and Apple’s share of that remained solid at 62 percent.

Big winners, bigger losers

Whatever drubbing Apple’s taking looks like a picnic compared to the bloodbath inflicted on Microsoft, which saw its share of the TVOD market fall from 17 to 7.6 percent. Unless Microsoft, or for that Walmart (4.2 percent) and Sony (2.4 percent), is ready to loose some heretofore unheralded master stroke, Redmond will either need to partner up or exit the space entirely.

The other big loser is DVD sales and rentals, steadily sliding since 2004 and down 11 percent in 2011 alone. Further, though physical media sales and rentals still represent the majority of the overall market, the future is assured — disks will continue to slide toward irrelevance (i.e. think vinyl albums).

The one bright spot in the movies on physical media space is kiosk rentals (i.e. Redbox), which last year took 34 percent of disk rental revenue and IHS expects that share of this declining market to surpass 50 percent by 2015.

The above rather puts all the noise about Apple’s rumored iTV, not to mention Hollywood’s attempts to force through draconian international copyright treaties, into stark perspective, doesn’t it?

What’s your take?

Related posts:
— Every Steve Jobs D Conference video now free on iTunes
— Review: Digitally Imported Radio app for iOS
VLC Media Player: One billion downloads and counting
— N.O.V.A. 3 pushes the mobile FPS envelope
— World War Z, The Art of Fielding: Audiobooks of the month

Leave your response!

Add your comment below, or trackback from your own site. You can also subscribe to these comments via RSS.

Be nice. Keep it clean. Stay on topic. No spam.