updated 10:55 am EST, Wed December 29, 2010
Estimated to be 475,000 per day, mostly TV
Video rentals from iTunes represent just a tenth or so of those recorded by Netflix, suggests Gleacher & Co. analyst Brian Marshall. Apple recently revealed that people are buying or renting about 150,000 movies and 400,000 TV shows through iTunes each day. Assuming that 75 percent of movies and 90 percent of shows are rented, says Marshall, Apple should be serving about 475,000 rentals a day versus Netflix's 5.1 million.
Correspondingly, Apple is believed to make about $60 million per quarter from rentals, and $50 million from purchases. In September, Netflix reported quarterly revenue of around $550 million. While rentals are the entirety of Netflix's business, however, Apple is generally believed to use the iTunes Store to drive hardware sales. Netflix support is in fact present on the Apple TV, and likely boosting traffic of the set-top.
Marshall theorizes that if Apple can grow rentals at the same rate as Netflix, they will come to form over $1 billion in revenue per year within five years. A 30 percent cut would give Apple $300 million in take-home money, whittled down further by expenses like hosting.