Netflix took top spot from Apple in US online movie revenue last year

Looking at data just released by IHS iSuppli, Netflix was able to take the top spot from Apple for online movie marketshare during 2011. With Apple experiencing a huge decline from 60.8-percent of the market the year before to 32.3-percent during 2011, Netflix came out on top for United States marketshare by revenue with 44 percent of the market last year. That is an incredible nearly 44 percent increase for Netflix, which had just 0.5-percent of the market in 2010.

What Netflix and iTunes have in common is that both services are focused on the hardware side of the business… Netflix is available on a very wide range of connected devices, while iTunes can take advantage of Apple’s soaring device sales growth… Nevertheless, comparisons between the two services have their limits… “Effectively the market has split,” Cryan said. “Netflix and Apple are competing for some of the same consumer time and money. However, the core value proposition of the two services is actually very different.”

While Netflix rules the SVOD market, its closest competitor—Hulu—is less than 10 percent of its size. Apple’s iTunes continues to dominate the transactional segment, accounting for 63.0 percent of revenue in this area, which was only down slightly from 64.6 percent in 2010. At the same time, the big growth story of 2011 was Walmart’s Vudu, which captured 8.2 percent of the growing transactional market, up from 2.8 percent last year. Most of this growth has been achieved by using a Netflix-like device strategy and has come at the expense of other providers, not Apple.