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iTunes reverses fortunes in online movies, gains US share

updated 05:15 pm EDT, Mon August 22, 2011

Zune, PlayStation stores lose ground

iTunes movie sales have managed a turnaround in US marketshare, according to research firm IHS. During the first half of 2011, Apple's portion of electronic sellthrough and video-on-demand spending grew to 65.8 percent, versus 64.9 percent in the first half of 2010. In an equivalent gap between 2009 and 2010, Apple dropped by 11.9 percent. IHS remarks that Apple's last rise in share was during 2009.

This year's growth also allegedly gives Apple the largest revenue increase amongst all online movie providers, although Netflix does not appear to be included under the study. "iTunes' expansion of its market lead represents a remarkable achievement in light of intensifying competition from a slew of aggressive rivals," says IHS' digital media research director, Arash Amel. "Much of iTunes' success can be traced to the rising usage of Apple's AirPlay system, which allows wireless video streaming to consumer electronic devices including televisions. This has expanded the reach of iTunes to new platforms, boosting sales of movies from the system." Also credited are video discounts and the growing iPad userbase.

Another service with high growth this year has been Walmart's Vudu. The platform now controls 5.3 percent of the US market, whereas it held just 1 percent in 1H 2010. Microsoft's Zune Marketplace, by contrast, has slipped from 18.5 to 16.2 percent. Sony's PlayStation Store has fallen from 8.2 percent to 4.4, while Amazon has inched ahead from 4 to 4.2 percent.

Vudu's performance is attributed to several factors, but chiefly "shrewd device strategy, a good customer experience, a compelling user interface and its $1/$2 rental pricing system." The setback for Microsoft is linked to receding Xbox 360 sales, following a holiday surge triggered by the Kinect. Sony's woes are blamed on the new-found popularity of Vudu, as well as the security breach that temporarily forced the PlayStation Network offline.




by MacNN Staff

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