Apple takes 4 percent of US digital video market, Netflix reigns
The NPD Group crowned Netflix the heavyweight champion of digital, video-on-demand services in a statement released earlier today. Between January 2011 and February 2011, Netflix accounted for 61 percent of all movies downloaded or streamed over the internet or offered on-demand through a cable or satellite television service.
Cable giant Comcast took second place with about 8 percent of the market. Apple, with a share of 4 percent, found itself in a three way tie for third place with DirecTV and Time Warner Cable. NPD used its new VideoWatch Digital tracking service to calculate its latest numbers, which also found digital video now makes up one quarter of all home video volume.
"Sales of DVDs and Blu-ray Discs still drive most home-video revenue, but VOD and other digital options are now beginning to make inroads with consumers," said Russ Crupnick, entertainment industry analyst for NPD.
VideoWatch Digital's results were based on 10,618 surveys completed by US consumers age 13 and older. In the survey, respondents recognized electronic sell-through (EST) services like iTunes had the most "current releases available," but Netflix won the titles for "overall shopping experience" and "value for price paid."
Apple began selling feature films through its iTunes Store in 2006. Apple added the option to rent films in 2008, charging US$3.99 to $4.99 per rental for new releases. With limited partners, 99 cent TV episode rentals began last year. In contrast, Netflix offers unlimited streaming options for its growing library of feature films and TV episodes starting at $7.99 per month.
NPD's latest findings account for both rentals and purchases. Netflix's market dominance comes primarily from rentals through its subscription services. In 2010, Netflix aggressively expanded its Instant Watch program, adding a variety of newly compatible set top devices like the second generation Apple TV and spending over $1 billion to acquire the rights to stream films from Paramount Pictures, Lions Gate and MGM.
The news isn't all bad for Apple. AppleInsider reports that another study released last month shows Apple still dominates online video sales with 64.5 percent of the market. That study focused on purchases only and did not include video streaming services like Hulu or Netflix.
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