Netflix is the number one online movie service according to new data from IHS.
Whether you focus on Apple ITune's drop from 60.8% marketshare in 2010 to 32.3% in 2011, or on Netflix's jump from 1% to 44% in the same period, the result is the same: Netflix is now the number one online movie service in the U.S., dethroning Apple.
The data comes from research firm IHS who attributed the change to a shift in consumer preferences to subscription models from transactional models.
“We are in the midst of a significant change in the way people pay to consume movies online,” said Dan Cryan, research director for digital media at IHS. “All the significant growth in revenue in the U.S. online movie business in 2011 was generated by rental business models, which provide temporary access, not permanent ownership.”
According to the report subscription streaming grew from $4.3 million in 2010 to $454 million in 2011, a whopping 10,000 percent. During the same period VOD sales grew to $273 million, a leap of 75%, and a significant increase except when compared to the extraordinary subscription growth.
The content delivered by the two services are significantly different: the majority of transactions on iTunes are for new releases while the majority of content delivered by Netflix is for older titles. One could postulate that the two services are fighting for the same consumer dollar or that they are complementary. The truth is probably somewhere in the middle and related to the consumer's basic interest in ownership of the content - a proposition that is almost always title driven.