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It’s not often that we get to write the words “step aside, Apple”, but that’s exactly what’s happened in the U.S. online movie business. According to a report from research firm IHS Screen Digest, Apple has been surpassed by Netflix in revenue from online movie and TV show purchases and rentals.

The IHS report revealed that Netflix now commands 44 percent of the domestic online movie distribution market, with Apple falling to second place with just over 32 percent. In 2010, Apple’s market share was just over 60 percent, by way of comparison.

Dan Cryan, research director for digital media at IHS, summed up his firm’s findings thusly:

“We are in the midst of a significant change in the way people pay to consume movies online . . . All the significant growth in revenue in the U.S. online movie business in 2011 was generated by rental business models, which provide temporary access, not permanent ownership.”

Cryan also said that Netflix and Apple somewhat complement each other, with Apple grabbing more of the new release market and catalog titles being the bread and butter of Netflix. Said Cryan:

“Effectively the market has split . . . Netflix and Apple are competing for some of the same consumer time and money. However, the core value proposition of the two services is actually very different.”

Is Netflix’s upwards trajectory sustainable, or will Apple be able to regain the commanding lead that it once held?

[via Paid Content]

2 Responses to “Netflix Passes Apple to Become Top Online Movie Supplier”

  1. Member [Join Now]
    ChadCronin [chadcronin]

    I’m not really a fan of the codec that Apple uses. While it looks great when needing to go frame by frame, I was never a fan of the image issue on fast scenes that seems to insert small lines in the image. I never see anyone mention this even though I have seen their videos on 5 different computers. I would say I am more interested in rental than buying since costs are so much higher with so many choices I don’t want buy stuff I won’t watch but a few times. If I do buy usually I find deals on Amazon VOD since I can stream that easy to my tv and don’t have to worry if my download gets deleted. For stuff I don’t want to buy Netflix works for older and Redbox for newer.

  2. Visitor [Join Now]
    Zach [visitor]

    I have stopped watching movies from Apple /Itunes. I realize they are high quality, but the download speed (at my mid-speed home network) is way too slow. I want an almost instant view like Netflix and now Amazon VOD offers. Unless Apple changes, I will go to Amazon for all new releases that I want to instantly watch and Netflix for catalog titles.