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Tuesday, March 15, 2011, 06:55 am PT (09:55 am ET)

Apple iTunes takes just 4% of US digital video market as Netflix dominates

Netflix is the dominant player in America's digital streaming and downloadable video market, representing 61 percent of all viewings, while Apple's iTunes is in a three-way tie for third place with 4 percent.

The NPD Group on Tuesday revealed statistics about the home video market in the U.S., and found that Netflix carries the lion's share of digital content with its Instant Watch streaming rental service. More than six out of ten digital movies watched in the U.S. are streamed via Netflix.

In second place is cable provider Comcast, which represents 8 percent of the American market. The numbers represent market share between January and February of 2011.

Apple is in third place with 4 percent, and is in a three-way tie with DirecTV and Time Warner. Apple began selling movies and TV shows on the iTunes store in 2006, and started offering movie rentals in 2008. TV show rentals for 99 cents, with limited partners, began in 2010.

The survey found that consumers know that services like iTunes have more current releases. But the convenience of Netflix ranked highest in terms of "overall shopping experience" and "value for price paid."

The NPD figures represent both rentals and purchases, but Netflix's dominance comes solely on the back of the subscription service's rentals. The company still offers discs by mail, but has aggressively expanded its Instant Watch program to a number of set top box devices, including Apple's new $99 Apple TV.

Despite Apple's 4 percent share of the digital video market, a separate survey released in February found that Apple is the market leader in terms of video sales, taking 64.5 percent of the market. That study did not count subscription services like Netflix or Hulu.

NPD's VideoWatch Digital tracking service found that digital video now makes up a quarter of all home video-watching volume. But sales of DVDs and Blu-ray discs are still the big money earners for Hollywood. The poll was based on 10,618 completed online surveys of U.S. consumers age 13 and older.

"Overwhelmingly digital movie buyers do not believe physical discs are out of fashion," said Russ Crupnick, entertainment industry analyst for NPD. "But their digital transactions were motivated by the immediate access and ease of acquisition provided by streaming and downloading digital video files."