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ITunes accounted for $248.3 million of consumer spending in the market in 2010.
Apple Inc.’s iTunes store in 2010 once again dominated the U.S. market for online movies, accounting for $248.3 million, or 64.5%, of $385 million in total consumer spending on movie electronic sell-through, or EST, and Internet video on demand (iVOD), according to a recent study by IHS Screen Digest. In 2009, iTunes captured $209.1 million, or 74.4%, of $281 million in total consumer spending.
IHS Screen Digest compiled the market share numbers as part of its Quarterly Updates Analysis product, which tracks the number of movies consumed via Internet-delivered services in a pay-per-transaction, on-demand model. EST and video on demand are individually paid downloads and streams.
After Apple, No. 4 in the Internet Retailer Top 500 Guide, Microsoft placed second in 2010, with 17.9% of market share, followed by Sony, which was third with 7.2% of the market. Amazon VOD placed fourth and Vudu, from Walmart, was fifth. IHS Screen Digest did not provide share data for Amazon or Vudu.
“The iTunes online store showed remarkable competitive resilience last year in the U.S. EST/iVOD movie business, staving off a growing field of tough challengers while keeping pace with a dramatic expansion for the overall market,” says Arash Amel, research director, digital media for IHS.
The iTunes store faces competition from Microsoft’s Zune Video and the PlayStation Store operated by Sony Corp., Amel says. But Walmart.com also poses a strong challenge to iTunes, he notes.
“The future of the online movie business may come down to a competitive battle between Apple and Walmart,” he says. “Although Walmart is not on the charts yet, the company will soon become a major player if its current momentum continues.”
Walmart’s aggressive drive for market share—including 99-cent promotional pricing on video-on-demand movies and support for a wide range of living room devices—generated a spike in consumption in the fourth quarter of 2010, he says.
“Vudu's growth in the last six weeks of 2010 suggests that Vudu will compete for third place in 2011,” he says.
Spending on video-on-demand services from Blockbuster Inc. was negligible in 2010, Amel says.
Netflix Inc. wasn’t included in the survey because it is a subscription service rather than an on-demand business. However, Netflix generated more than 300 million streams of movies and TV shows in 2010, paying close to $450 million to studios and networks for streaming rights, Amel says.
IHS Inc., a data and analysis provider, acquired Screen Digest, a digital media and technology research company, through its purchase of iSuppli last year. ISuppli is a market research company.