Apple iTunes Dominating Video Sales And Rentals

For many years, Apple customers have complained about the company’s failure to adopt the Blu-ray standard for its devices; however, Apple’s focus on non-optical based entertainment appears to be paying off. According to a new report from the NPD Group, iTunes is the top provider for iVOD (Internet Video On Demand). That particular sector does not include streaming services such as Netflix.

According to the report, Apple iTunes was responsible for 45 percent of online video rentals, far exceeding second place finisher Amazon, which captured 18 percent of the market. Wal-Mart owned Vudu finished in third place with 15 percent, and Microsoft captured 14 percent with its Zune/Xbox Video service.

Seventy-two percent of the video-on-demand (VOD) sector is still controlled by cable operators; however, the “digital download” portion has grown from two percent to 16 percent year-over-year.

Apple is also in full control of the “electronic sell-through” market where users have flocked to iTunes to purchase videos rather than renting them from the tech giant.

Industry numbers appear to be backed up by an IHS study, which found Apple dominating 64.5 percent of the market followed by Microsoft with 18 percent and Sony with 7.2 percent.

Competition is heating up in the online video sales and video rental markets, which in turn could lead to further competition and less control for cable TV providers.

Apple’s decision to avoid the Blu-ray market, in the meantime, appears to be paying off. The video disc market slipped three percent in the last year as more users have flocked to cloud video services that require only an internet connection. Apple has also been able to avoid much of the DRM debate associated with Blu-ray discs.

Apple has begun to remove optical drives completely from its line of devices, and that strategy will likely be joined by Apple competitors in the near future.