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Apple Loses Online Video Share But Still Tops

2/07/2011 02:19:13 PM Eastern

El Segundo, Calif. - Apple's iTunes store lost
share in the U.S. market for online movie sell-though and Internet
video-on-demand (iVOD) service in 2010, 
but the company nonetheless retained its top market-share spot, IHS Screen Digest research found.

The iTunes online store accounted for more
than two-thirds of U.S. consumers' online movie spending, at 64.5 percent in
2010, down from 2009's 74.4 percent, the company found. Apple nonetheless
posted dollar gains because the total market grew more than 60 percent for the
year and because of the introduction of the iPad and a second-generation Apple
TV, IHS said.

"Apple faced
serious competition from Microsoft's Zune Video and Sony's PlayStation Store,
as well as from Amazon and -- most significantly -- Walmart," said Arash Amel,
IHS digital media research director. Still, "Apple's strong performance in iVOD
will allow it to continue to bypass the video on demand services offered by
many major cable operators," he said.

Competition from Microsoft intensified in both
the movie electronic sell-through and iVOD segments because of the success of
the Kinect 3D motion controller for Xbox 360, driving up the share of the Zune
Video platform to 17.9 percent from 2009's 11.6 percent, he said.  In 2010, Sony maintained the No. 3 position
with a 7.2 percent share, up from 5.7 percent in 2009.

All of the top
three services, however, face rising competition from Amazon's VOD service and
Walmart's Vudu service, Amel said. Walmart's market-share quest, he noted,
drove a sales spike in the fourth quarter, thanks to $0.99 promotional pricing
on iVOD movies and support for multiple living-room devices, including Sony's
PlayStation3.

"The future of the online movie business may
come down to competitive battle between Apple and Walmart," Amel said.
"Although Walmart is not on the charts yet, the company soon will become a
major player if its current momentum continues."

U.S. Online Video Share*
(by % of consumer spending)

Rank
Company
2009
2010
 1  Apple  74.4  64.5
 2  Microsoft  11.6  17.9
 3  Sony  5.7  7.2
   Others  8.3  10.4

 

 

 

 

 

 

 

 

Source: IHS Screen Digest, February 2011
*Consists of electronic movie sell-through and Internet video on demand

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