Netflix Passes Apple As Top Provider Of Online Movies

Up until 2010, Apple had always been the main outlet for online movie watchers in the United States, but recent changes have reshuffled the fortunes of the main providers, and Apple is no longer on top.

As of 2011, Apple has lost its top position to Netflix, according to research published by IHS iSuppli last Friday. The position is to do with gross revenue generation rather than viewer numbers.

By 2010, Netflix still cornered only 0.5 percent of the market revenue, but startlingly began a campaign of rapid growth that caused it to gain considerable ground over the course of the year. In 2011, Netflix had established itself as a major player in the market, cornering 44 percent of the overall revenue generated from online movie watching. At its peak, in 2010, Apple was still fending off competition and taking home over 60 percent of total market revenue.

Apple now accounts for less than one third, corresponding to a dramatic shift across the whole market during 2011. The year was also marked by decreases in overall revenue for both Microsoft and Sony. Vudu, a small enterprise owned by Walmart, saw a modest increase from 2.7 percent to 4.2 percent. By contrast, research indicates that the whole market for online movie watching actually doubled in 2011, generating an almost one billion dollar industry. The same research projects that the industry is likely to double in size again over the course of 2012. In 2011, revenue generated from just Netflix's digital services amounted to one and a half billion, with 23.6 million subscribers in the United States alone.

A huge part of the push for growth is coming from booming consumer subscriptions to video on demand services. In 2011, Netflix parted the conjoined video on demand and DVD rental services, allowing more accurate visibility in the trends of online consumption. The shift allowed consumer to side step the transaction-oriented old model in exchange for an upgrade to a longer term subscription that more closely resembles TV subscription.

Sources for this article include:

http://www.macobserver.com/tmo/artic...ce_by_revenue/

http://www.businessweek.com/news/201...evenue-in-2011

http://money.cnn.com/2012/06/01/tech...enue/index.htm