Apple’s iTunes loses market share in battle for video viewers
“Apple Inc.’s iTunes Store — already struggling against rising competition for music listeners — is losing the battle for video viewers as well,” Ben Fritz and Tripp Mickle report for The Wall Street Journal. “The company’s market share for renting and selling movies has been falling for several years, tumbling to between 20% and 35% from well over 50% as recently as 2012, according to people with knowledge of the matter.”
“No third parties track market share in the digital-movie business, making exact figures impossible to obtain. Different Hollywood studios do different amounts of business with Apple, but several of them report a marked decline in iTunes’ leadership position,” Fritz and Mickle report. “An Apple spokeswoman, who didn’t dispute the market-share estimates, said Apple is focused on providing customers with video content across subscription services such as Netflix and HBO, as well as iTunes, where she said movie purchases and rentals have increased over the past year and hit their highest level in more than a decade.”
“Apple’s iTunes has faced a host of rising competitors in recent years in the market for renting and buying new movies online,” Fritz and Mickle report. “One that has had a big impact is Amazon.com Inc., which in addition to its Prime subscription service rents and sells movies on a “transactional” basis. Its market share in that business has recently risen to around 20%, studio executives who are involved in home-entertainment sales say, as it has been highlighting its entertainment offerings. Another is Comcast Corp., the nation’s largest cable provider by subscribers, which has long rented movies on its set-top boxes and in late 2013 began selling digital copies as well. It now has about 15% of the combined market, according to people involved in digital movie sales.”
Eddy CueMacDailyNews Take: Despite the fact that Apple’s iTunes isn’t run by the brightest Apple VP who ever graced the face of the earth (Eddy Cue), digital movie rentals are a commodity. As long as Apple has the same titles are the other outlets at around the same prices, market share is meaningless. The movie rental/sales service is there to sell and feed devices, not to make massive profits in a market full of similar offerings. Share erosion is normal when you’ve pioneered a market and then a bunch of followers enter with similar offerings.
Beyond blockbuster exclusives, if Apple were to develop quality original content that could build and keep an audience (no, Eddy, Planet of the Apps isn’t it, duh) and place it in proper proximity to movie sales and rentals (no, Eddy, not in Apple Music, duh), they’d have a better shot at retaining share.
