According to most recent statistics released by research firm IHS iSuppli, Netflix became the top-ranking US online movie service by revenue for 2011, with the company’s astounding gains in subscription-based online video-on-demand (SVOD) virtually slashing the market share of Apple’s iTunes service by half.
The IHS figures revealed that Netflix’s share of online movie streaming revenue exploded from less than one percent in 2010 to over 40 percent last year; with the figure helping the company to depose the Apple and its iTunes service.
In comparison to the incredible rise in Netflix’s revenue share, Apple's share plunged deplorably from 60.8 percent in 2010 to 32.3 percent in 2011 --- with the figures underscoring a sharp decline from iTunes’ overwhelming 71.5 percent share in 2009.
As per the IHS figures, SVOD revenue witnessed a mammoth leap to $454 million in 2011, thereby translating into a staggering 10,000 percent increase from $4.3 million in 2010. As a result, SVOD turned out to be the most valuable sector of the US online movie market, completely overshadowing the 75 percent revenue growth witnessed by transaction-based services like iTunes.
Noting that a notable change is currently underway in the manner in which people pay to consume movies online, Dan Cryan – IHS’ research director for digital media – said: “All the significant growth in revenue in the U. S. online movie business in 2011 was generated by rental business models, which provide temporary access, not permanent ownership.”