updated 09:40 am EDT, Tue March 15, 2011
NPD gives Netflix 61pc of online movies
Netflix now has a dominant share of the online video on demand business, according to new NPD data. The subscription streaming service has 61 percent of all the movies downloaded or streamed in January and February. Apple, despite iTunes' reputation, was at just four percent and tied with both DirecTV and Time Warner Cable.
Comcast's Xfinity service was actually higher at eight percent in spite of being limited to those on one cable provider.
Analysts at NPD believed the gap came from not just prices but the experience. Apple's store has a much wider selection of up to date titles, but Netflix's service costs as little as $8 per month, making it a much better value for those who don't mind the selection. It also had a better "overall shopping experience," respondents said. Although not mentioned, Netflix's ubiquity and queuing might have helped, since it can be found on many TVs and Blu-ray players as well as all major game consoles, the iPad, and the iPhone.
The share would help explain Apple's decision to include Netflix on the current Apple TV, since it gives users access to a more popular video service.
Research also suggested that, despite cable and satellite provider protests to the contrary, Internet video was also making incursions into the home. About a quarter of all home video, regardless of format, was now coming from an online source, NPD said. Telecom giants like Time Warner have tried to downplay Netflix but have watched as it has reduced the incentive to use cable video on demand services or to subscribe to premium channel bundles.