Bits Blog: Apple and Netflix Dominate Online Video

Ryan Anson/Agence France-Presse — Getty Images Steve Jobs discussing the Apple TV in 2010. In a recent study, the NPD Group, a research firm, said Apple was by and large the leader for home video downloads.

Now that the video rental store is all but dead (see: Blockbuster), many people are turning to Internet services to get TV shows and movies. By some measures, Apple is No. 1 in online video, but by others, Netflix is leading.

Apple on Wednesday released new statistics on the videos it provides in the iTunes Store. The company said customers were downloading 800,000 television episodes and 350,000 movies a day.

In a recent study, the NPD Group, a research firm, said Apple was by and large the leader for home video downloads. For television shows, iTunes accounted for 67 percent of this market in 2012, and Microsoft’s Xbox video service was a distant second with 14 percent of the market, NPD said. For movies, iTunes had a 65 percent share of the market, with Amazon and Microsoft far behind at 10 percent each, it said.

Another popular method for watching movies and TV online is paying a subscription and streaming as many as you want. In the subscriptions-based video streaming market, Netflix is dominant, with a 90 percent share, and Hulu Plus and Amazon are still hardly relevant.

To put things in perspective, subscription-based streaming is the most popular method for watching online video. For all the movies watched at home in the first quarter of 2013, 19 percent of consumers watched a movie using a subscription-based service like Netflix, and 5 percent downloaded a movie rental from an on-demand service like iTunes, according to Russ Crupnick, an NPD analyst who follows the online video industry. About 74 percent of consumers watched a movie on a DVD or Blu-ray disc they bought or rented, he said. (The numbers are not mutually exclusive; some people watch movies on Blu-ray, Netflix and iTunes.)

Apple, to date, has not entered subscription-based video streaming. Instead, it has teamed up with companies that offer that service. The Netflix and Hulu Plus apps are available on the Apple TV.

Apple on Wednesday also announced new partnerships with Home Box Office and ESPN. Coming to the Apple TV are the HBO GO app, which allows HBO subscribers to stream the network’s programs, along with the WatchESPN app, which allows cable TV subscribers to stream some ESPN channels. Apple TV owners can get the apps by downloading a free software update.