Tuesday, August 23, 2011, 04:02 pm PT (07:02 pm ET)
AirPlay credited with winning Apple movie market share in iTunesApple has resumed growth among online movie stores after spurt of competition blunted its market share last year, a recovery credited in part to the company's new AirTunes mobile integration feature.
Despite Apple's tiny increase in market share, growing from 64.9 to 65.8 percent in the first half of 2011 over the same period last year, "iTunes experienced the largest revenue increase growth among all online movie providers during the first half," noted research firm IHS iSuppli.
Much of iTunes success can be traced to the rising usage of Apples 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.
IHS added "other factors that enhanced iTunes share included the growing installed base of the iPad and price promotions."
Survival of the fleetest
Last year, Apple's share of movie downloads fell from 74.4 percent to a 64.5 percent, according to data reported by IHS. That drop reflected a 60 percent expansion of the online movie market, as iTunes began competing with Microsoft's Zune Video store and Sony's PlayStation Store, alongside WalMart's acquisition and promotion of Vudu.
The successful launch of Microsoft's Xbox Kinect motion controller helped give it a bump in 2010, with Microsoft gaining 6.3 percentage points in the face of Apple's loss of ten.
However, over the first six months of 2011, Apple has regained a percentage point as Microsoft's video marketplace dropped by more than two. IHS noted that while Kinect helped improve sales of the Xbox, "which can access movies on the Zune Video Marketplace" the "impact of the surge since has dwindled, causing Zunes share to decline."
Sony's share of the online movie market has done even worse, dropping in share from 8.2 to 4.4 percent and ending up with less share than it had in 2009. IHS blamed Sony's losses on competition from Vudu as well as the security problems that caused Sony to shut down its PlayStation network during the period.
Walmart's Vudu jumped from 1 percent share to 5.3 percent, leveraging a "shrewd device strategy, a good customer experience, a compelling user interface and its $1/$2 rental pricing system."
Amazon, which took direct aim at iTunes, only managed to grow its share of online movies from 4 percent to 4.2 percent.
IHS said the "new release on-demand" online movie business is "all about iVOD (internet Video on Demand)," noting that In the current economic climate, consumers are more interested in accessing movies than in owning them."
For this reason, the firm says that growth in EST (electronic sell through, or paid downloads) "has virtually stopped. Whatever small EST growth that is happening is coming from aggressive sales on iTunes, as well as discounting across major services."
IHS' figures don't include subscription services such as the popular Netflix plan, which allows users to pay a recurring fee to either mail back DVDs or, as the company has recently focused upon, download unlimited movies from its streaming catalog.
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