iTunes' share of video sales and rentals market reportedly in free fall amidst competition...

Posted:
in iPod + iTunes + AppleTV edited July 2017
Facing increased competition from the likes of Amazon and Comcast, Apple's once commanding market share lead in the online video sales and rental industry has been more than halved, according to a new report.




Citing Hollywood studio sources, The Wall Street Journal on Sunday said Apple's share for selling and renting movies, as well as other video content, has dropped to between 20 percent and 35 percent, down from over 50 percent as recently as 2012.

The steep decline comes as competitors Amazon and Comcast enjoy market share gains on the back of aggressive industry moves.

Amazon, for example, saw its share of the overall video business grow to around 20 percent, studio executives claim. The online retail giant markets its digital wares through the Amazon Prime subscription service, as well as individual sales and rentals marketed through Amazon Video.

Comcast, the nation's largest cable provider, boosted its stake in the market to 15 percent after it starting selling digital movies and television shows to customers in 2013, the report said. Like other cable companies, Comcast has for decades rented video content to customers.

Interestingly, the loss of market share is not uniform across genres, the report said. For example, iTunes is a top distributor of independent movies, as Apple promotes and signs exclusive deals for films made outside of the traditional movie studio system, sources said.

When reached for comment, an unnamed Apple spokeswoman did not dispute the figures provided to WSJ, but noted iTunes movie sales and rentals increased over the past year and are now at their highest point in more than a decade. She went on to say that Apple is also focusing on delivering content to customers via subscription services like Netflix and HBO.

While the report's numbers seemingly conflict with Apple's claims of growth, WSJ explains the combined market is on the rise. According to estimates from PricewaterhouseCoopers, U.S. digital movie rentals and sales rose 12 percent to $5.3 billion in 2016. Whether that accounts for iTunes' annual growth, but supposedly steep decline in market share, is unclear.

The report also cites estimates from Bernstein Research, which claims iTunes video, music, book and magazine sales generated $4.1 billion in revenue.

Also impacting iTunes' performance are streaming companies. The rise of subscription-based services like Amazon Prime and Netflix contributed to a decline in video-on-demand rental revenue, which according to PricewaterhouseCoopers dropped 4 percent to $1.8 billion last year. Movie sales also suffered a slowdown, with purchase revenues growing 21 percent to hit $3.5 billion last year as compared to a 29 percent year-over-year bump the year prior.

The news comes as Apple looks to grow its booming services business, which includes iTunes, iCloud, Apple Music, Apple Pay, Apple Care and the various App Stores. The sector generated $7.04 billion during Apple's second fiscal quarter of 2017, up from $5.99 billion in the same period last year. CEO Tim Cook has said on multiple occasions that services is on track to generate revenues equivalent to a Fortune 100 company by the end of 2017.
«13

Comments

  • Reply 1 of 54
    sdw2001sdw2001 Posts: 16,887member
    Really not surprising given the increased options.  I either stream on Netflix or Prime.  But if I buy a movie digitally, I use iTunes.  I only own maybe 10.  I got suckered into "Steve Jobs" thinking it would be great, and I didn't like it at all.  Should have rented it!  
    SpamSandwich
  • Reply 2 of 54
    radarthekatradarthekat Posts: 2,375moderator
    The story is basically the same one we've heard in every market in which Apple participates.  That being, Apple's sales are not growing as fast as the overall market.  What's new?  I'll bet Coach sales have rarely grown as fat as the overall handbag market.  All markets have segments, and the growth in the lower-priced, commoditized segments is almost always faster than the higher-priced premium segments.  No surprise there.  wheres the money being made, and is Apple profiting handsomely in its segment, while growing?  Thosecare the questions to ask.  

     On a side note, it seems Wall St likes to anchor on all the wrong things.  For example, if a company [Apple], participates in a market, Wall St myopically measures its success by focusing on just that one market, and usually the wrong metrics of true success (profit would be where I'd start, rarely where Wall St starts).  And what about measuring against other businesses.  If I own a coffee shop that does half as well as Starbucks, but three times as well as any other business in my neighborhood, guess what... I made a good decision to start a coffee shop rather than a hat store.  Apple is a better business than KO or AMZN, once you back up and look down from the 10,000' height.  And yet, bizarrely, it's assigned a significantly lower valuation than either.  
    watto_cobraScot1fotoformatjahbladeSpamSandwichpscooter63StrangeDays
  • Reply 3 of 54
    anantksundaramanantksundaram Posts: 18,474member
    Not surprising at all. AppleTV has become an utterly dated, mediocre product -- I barely use it anymore, except to listen to my music on the cloud. Our cable provider, Comcast, has really upped its game. I can watch pretty much anything I need -- movies, TV shows -- on any of my devices, not to mention my TV. Often I check for shows on Comcast first, since it searches across every content provider and tells me when stuff is free on HBO, Showtime, Netflix, Starz, etc., stuff that Apple would charge me for; i.e., it does a good-enough 'universal' search. 

    Apple has essentially surrendered the TV/movie game to its competitors.  When Cook makes a statement like 'AppleTV is the future of television,' it sounds laughable, actually. I can't believe he can say that with a straight face. Eddy Cue has been been pathetic in his role, and has not served Apple well. It's amazing that's he's still around. 
    boredumbSpamSandwich
  • Reply 4 of 54
    kkqd1337kkqd1337 Posts: 126member
    I think piracy is still the main issue in the movie/TV market. For me, too much of the content is too expensive to just impulse buy, especially without being sure you will enjoy it. If Amazon & Netflix can supply so much content for $10/month - I don't see why Hollywood can't sort themselves out.
    cali
  • Reply 5 of 54
    metrixmetrix Posts: 200member
    I think there has been a huge drop due to illegal movie downloads using Kodi on Firesticks. Sounds a lot like the loss of our book stores.
  • Reply 6 of 54
    tzeshantzeshan Posts: 1,665member
    Amazon, Comcast?  What a joke!  It is Netflix! Period!
    cali
  • Reply 7 of 54

    I've never gotten rentals to work with iTunes. When I decide to rent a movie and watch it immediately, I get a message saying that it will be ready in half an hour. Depending on the connection, that stretches to an hour or so.

    When the movie starts streaming, good luck trying to go back a couple of minutes. It just stutters and the entire "please wait" game starts again.

    It could easily be a slow internet connection, but I've never had these problems with Netflix. Netflix streams movies and shows on the same spotty internet connection that Apple just can't seem to handle.

    What makes it more of a head-scratcher is that Apple Events stream without issues on the same connection.

    I've lost money on a couple of rentals on iTunes as it was just too frustrating to sit through the process.


    I don't purchase any English movies on iTunes because I get buy the washed down, censored version of the movie. I buy the Blu-rays from Amazon instead.

  • Reply 8 of 54
    I don't buy movies from Apple. I rent movies from Redbox and watch Netflix. I don't listen to Apple Music. I listen to free Pandora, free Spotify and paid SiriusXM (for car only and it's a built-in). I buy only Transformers movies from Apple because my son loves to watch them over and over again on his iPad. Funny how lifestyle had changed comparing to decades back.
  • Reply 9 of 54
    stanthemanstantheman Posts: 270member
    Ho-hum story, click-bait (alarmist) headline, zero-value comment by moderator (Radarthecat) and anti-iTunes comments by tightwads who prefer old, free Amazon Prime video to higher-quality videos from iTunes.

    I stopped watching broadcast-cable TV to avoid the specific video content that Amazon Prime gives away. I pay for Prime to save on 2-day delivery, not to watch Prime movies. It is great to save money, but there is a benefit for those who pay for entertainment.
    edited July 2017
  • Reply 10 of 54
    calicali Posts: 3,495member
    Apple really has been sitting on it's hands with iTunes. Everyone else are providing cool promotions while iTunes just sits there.
    Apple TV? Dated on day 1.
  • Reply 11 of 54
    I always buy on iTunes because, usually, the iTunes Extras usually provide a decent set of extra features - usually mimicking the physical disc release.  The number of audio commentaries being included, for example, has been a great reason to buy.  No other service does this (to my knowledge).  Plus the generous device allowance of iTunes allows me to download the content across multiple devices.

    I mostly rent on Amazon Prime Video because there are usually offers and discounts that make the cost of renting much more reasonable.  But I don't really trust Amazon sufficiently to buy non-physical movies from them.  Having just seen the BBC Store close down after a year, it makes me very nervous for streaming only services like this.  But at least the BBC refunded the full cost of everything that I bought from them plus, ironically, giving me a £20 voucher for Amazon (which I used to rent stuff).
    edited July 2017
  • Reply 12 of 54
    NY1822NY1822 Posts: 493member
    what is baked into the Amazon 20% market share? are they just including total prime memberships bc that includes Amazon Video...i highly doubt individual sales/rentals of movies on Amazon give it a 20% share....by this logic, if apple released a few movies/shows on Apple Music, are they now including total Apple Music Subscribers...?
  • Reply 13 of 54
    gatorguygatorguy Posts: 18,603member
    NY1822 said:
    what is baked into the Amazon 20% market share? are they just including total prime memberships bc that includes Amazon Video...i highly doubt individual sales/rentals of movies on Amazon give it a 20% share....by this logic, if apple released a few movies/shows on Apple Music, are they now including total Apple Music Subscribers...?
    I don't see any reason at all to doubt Amazon has at least a 20% share of the video streaming business. With millions of Amazon Prime members who get to watch a broad swath of their catalog for no additional charge after the annual membership fee, reasonable (in general) rental fees for the movies that aren't Prime-eligible, and Amazon Video being available on a multitude of platforms, smart tv's and services from Roku to TIVO they have a huge presence.
    edited July 2017
  • Reply 14 of 54
    smaffeismaffei Posts: 200member
    Well, the fact that Apple's rentals are still 24 hours while Amazon's are 48 hours for the same price might have something to do with it. 
    ksec
  • Reply 15 of 54
    jcs2305jcs2305 Posts: 392member
    Not surprising at all. AppleTV has become an utterly dated, mediocre product -- I barely use it anymore, except to listen to my music on the cloud. Our cable provider, Comcast, has really upped its game. I can watch pretty much anything I need -- movies, TV shows -- on any of my devices, not to mention my TV. Often I check for shows on Comcast first, since it searches across every content provider and tells me when stuff is free on HBO, Showtime, Netflix, Starz, etc., stuff that Apple would charge me for; i.e., it does a good-enough 'universal' search. 

    Apple has essentially surrendered the TV/movie game to its competitors.  When Cook makes a statement like 'AppleTV is the future of television,' it sounds laughable, actually. I can't believe he can say that with a straight face. Eddy Cue has been been pathetic in his role, and has not served Apple well. It's amazing that's he's still around. 
    Just because you continue to pay Comcast prices doesn't mean the ATV has somehow become dated and mediocre ?  That's nonsense. That may be your usage scenerio, but that doesn't apply to everyone or the product in it's entirety. 
    StrangeDays
  • Reply 16 of 54
    jcs2305 said:
    Not surprising at all. AppleTV has become an utterly dated, mediocre product -- I barely use it anymore, except to listen to my music on the cloud. Our cable provider, Comcast, has really upped its game. I can watch pretty much anything I need -- movies, TV shows -- on any of my devices, not to mention my TV. Often I check for shows on Comcast first, since it searches across every content provider and tells me when stuff is free on HBO, Showtime, Netflix, Starz, etc., stuff that Apple would charge me for; i.e., it does a good-enough 'universal' search. 

    Apple has essentially surrendered the TV/movie game to its competitors.  When Cook makes a statement like 'AppleTV is the future of television,' it sounds laughable, actually. I can't believe he can say that with a straight face. Eddy Cue has been been pathetic in his role, and has not served Apple well. It's amazing that's he's still around. 
    Just because you continue to pay Comcast prices doesn't mean the ATV has somehow become dated and mediocre ?  That's nonsense. That may be your usage scenerio, but that doesn't apply to everyone or the product in it's entirety. 
    I was mentioning my usage scenario, not yours. Get a clue. 

    It just so happens there are still a lot of people like me, and thus my speculation for the empirical reason for the headline. If you have a different explanation, provide it. 
  • Reply 17 of 54
    mobiusmobius Posts: 374member
    smaffei said:
    Well, the fact that Apple's rentals are still 24 hours while Amazon's are 48 hours for the same price might have something to do with it. 
    I guess it may vary depending on the country, but it was 48 hours rental time in the UK when I looked yesterday.
    asdasd
  • Reply 18 of 54

    I've never gotten rentals to work with iTunes. When I decide to rent a movie and watch it immediately, I get a message saying that it will be ready in half an hour. Depending on the connection, that stretches to an hour or so.

    When the movie starts streaming, good luck trying to go back a couple of minutes. It just stutters and the entire "please wait" game starts again.

    It could easily be a slow internet connection, but I've never had these problems with Netflix. Netflix streams movies and shows on the same spotty internet connection that Apple just can't seem to handle.

    What makes it more of a head-scratcher is that Apple Events stream without issues on the same connection.

    I've lost money on a couple of rentals on iTunes as it was just too frustrating to sit through the process.


    I don't purchase any English movies on iTunes because I get buy the washed down, censored version of the movie. I buy the Blu-rays from Amazon instead.

    It has a bit to do with both bandwidth and Apple TV.  This can be fixed with bandwidth for sure as I do not have this problem (have have 100M down).  Used to have this issue all the time when I had 1M down....Netflix has a good scaling effect for low bandwidth situations and I am not 100% sure Apple has a scaler or at least not a good one.
  • Reply 19 of 54
    sirlance99sirlance99 Posts: 1,083member
    mbdrake76 said:
    I always buy on iTunes because, usually, the iTunes Extras usually provide a decent set of extra features - usually mimicking the physical disc release.  The number of audio commentaries being included, for example, has been a great reason to buy.  No other service does this (to my knowledge).  Plus the generous device allowance of iTunes allows me to download the content across multiple devices.

    I mostly rent on Amazon Prime Video because there are usually offers and discounts that make the cost of renting much more reasonable.  But I don't really trust Amazon sufficiently to buy non-physical movies from them.  Having just seen the BBC Store close down after a year, it makes me very nervous for streaming only services like this.  But at least the BBC refunded the full cost of everything that I bought from them plus, ironically, giving me a £20 voucher for Amazon (which I used to rent stuff).
    VUDU does the same thing with the extras. I buy all my movies digitally through Vudu as I can stream them on anything I have, Smart TV, Xbox, Roku, Chromcast, iPhone, iPad and still get all the extras. 


  • Reply 20 of 54
    GeorgeBMacGeorgeBMac Posts: 2,252member
    I won't buy online movies:   You either have to download and save them and then keep track of them on your own harddrives -- or lock yourself into a particular vendor's cloud service.   No thanks.   DVDs are cheaper, easier to store and last longer....

    Renting is better -- but overly expensive....   It's really only viable for special movies that you have a particular urge to watch.

    Because:
    The cable companies have held a strangle hold on the video market for decades.  And, they are not ready to let go of our necks just yet - particularly as Trump is promising them the end of net neutrality so they can charge (or throttle) any video streaming that doesn't provide them with a revenue stream.
    pscooter63
Sign In or Register to comment.