NPD: Apple dominates Internet video market

itunesIn common with digital music downloads, the decade-old iTunes Store leveraged first-mover advantage, and popular devices, to command the lead in digital downloads of movies and TV shows, according to global information company The NPD Group.

The firm says that Apple dominates the home digital-video sector, in much the same way it dominates digital music. iTunes’ share of electronic sell-through (EST) for television shows reached 67 per cent in 2012. Electronic Sell Through (EST) television sales from Xbox Video, Apple’s nearest competitor, comprised 14 per cent of the market. When it comes to feature-length movies, iTunes boasted a 65 per cent share of EST, with Amazon and Xbox Video far behind at 10 per cent each.

In the Internet video-on-demand (iVoD) sector, the field is more crowded, suggests NPD; however, iTunes has a clear lead there, too, with a 45 per cent market share of online movie rentals, which is more than twice the share of Amazon Instant Video (18 per cent) and triple that for VUDU (15 per cent).

“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.”

According to NPD’s VideoWatch customer satisfaction tracking, eight out of 10 iTunes video customers said their shopping experience was excellent or very good (77 per cent), 75 per cent were pleased with the level of current releases, and 73 per cent praised the selection. “We’ve seen big name entertainment retailers lose share, and even close, as their customer satisfaction metrics faded; however, that’s clearly not the case with iTunes. Customers are quite happy with the store,” said Crupnick.

Another key to iTunes’ success is consumer cross-shopping across categories. According to NPD’s Entertainment Trends In America consumer tracking, based on March 2013 results, 58 per cent of those who rented a movie from iTunes also bought a music download in the prior three months.

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