Apple’s iTunes catalogue revolutionized the way people consume media. Why go to BlockBuster to rent a movie when you can download it from iTunes just as quickly? While most of the market has been trying to catch up, Apple’s lead in online video sales has remained dominant in the U.S.
NPD released a new report that highlights Apple’s strength in electronic video sales and rentals. While everyone else is fighting for second place, Apple still commands over 67% of the market.
According to NPD’s study, Apple dominates online video purchases the same way iTunes has ruled over online music sales. In 2012, 67% of online video purchases were made through iTunes, while Apple’s closest competitor, Xbox Video, only managed to capture 10% of the market for movies and 14% for TV Shows. Amazon Instant Video was third with 10% of movie and 8% of TV shows.
When it comes to video rentals, it’s a similar story, even though Apple doesn’t have quite as good margins. For video on demand, iTunes captures 45% of the market, while Amazon Instant Video grabbed 18% in 2012.
“Apple has successfully leveraged its first-mover advantage and of iTunes, iOS and the popularity of iPhone and iPad to dominate the digital sale and rental markets for movies and music,” said Russ Crupnick, senior vice president of industry analysis at NPD. “While worthy competitors have come along, no other retailer has so thoroughly dominated its core entertainment product categories for so long.”
Even though Apple’s able to sell the most digital video downloads, it’s also putting a smile on customer’s faces while they do it. 77% of iTunes customers said their shopping experience was either excellent or very good. However, while Apple’s iTune success is impressive, NPD’s study failed to take subscription services like Netflix into account, which would seriously dwarf iTunes’ marketshare.
Hmmm, maybe Apple should get into video streaming next?