iTunes makes gains in online movie market

Apple’s iTunes is making gains in the online movie market – and successfully reversing previous declines in the lucrative space.

According to IHS analyst Arash Amel, iTunes’ share of U.S. consumer spending for movie electronic sell-through (EST) and Internet video on demand (iVOD) rose to 65.8% in the first half of 2011, up from 64.9% for the same period in 2010.

This expansion, while somewhat limited, sharply contrasts with the first half of 2010 when the share held by Apple’s iTunes declined by 11.9 points year-on-year. 

In fact, the first half of 2011 marked the first increase in share for iTunes since two years ago in 2009.

Indeed, the service actually experienced the largest revenue increase growth amongst all online movie providers.

“iTunes’ expansion of its market lead represents a remarkable achievement in light of intensifying competition from a slew of aggressive rivals,” Amel told TG Daily in an e-mailed statement. 

“Much of iTunes’ success can be traced to the rising usage of Apple’s [iPad] and AirPlay system, which allows wireless video streaming to consumer electronic devices including televisions. This has expanded the reach of iTunes to new platforms, boosting sales of movies from the system.”

Meanwhile, Microsoft’s Zune Video Marketplace lost market share in the first half, declining to 16.2%, down from 18.5% during the same period in 2010. 

Although Redmond enjoyed a market share surge during the 2010 holiday season courtesy of strong Kinect sales, the impact of the short-lived jump has long since dwindled, causing Zune’s share to decline.

Finally, Sony’s PlayStation Store – which accounted for 4.4 percent of iVOD and EST movie share in the first half of 2011 – plummeted from 8.2% in 2010.

“The PlayStation Store fell out of the Top 3 rankings chiefly because [Walmart’s] Vudu cannibalized its market share,” Amel confirmed.

“Furthermore, the global security breach that shut down Sony’s online gaming operations during a major portion of the first half had a deleterious impact on the PlayStation Store’s business.”