Apple Inc. (AAPL) was once the king of the online video market, but in just a few years, it's lost its tremendous lead.
By contrast, Amazon.com Inc. (AMZN) and Comcast Corp. (CMCSA) have seen huge gains in the market, which involves sales and rentals of movies. Apple controlled more than 50% of the digital movie business as recently as 2012, but that share has since dropped to between 20% to 35%, the Wall Street Journal reports, citing sources familiar with the situation. Amazon, which offers movie rentals and purchases through its website, has seen its share increase to about 20%, while Comcast, which makes those services available on its set-top boxes, now holds a 15% share.
Comcast has been renting movies via its set-top boxes since 2013 and recently rolled out the X1, its next generation video platform for cable boxes and mobile devices. Amazon, meanwhile, has been aggressively moving into digital video, making its video platform available on most connected TVs, which has given it exposure to consumers who wouldn't otherwise consume those kinds of content, said Dan Cryan, senior director of broadband media for IHS Markit.
Although Apple has lost its lead, a company spokesperson told the Journal that, over the past year, movie purchases and rentals on iTunes hit their highest level in more than a decade. Representatives from Apple weren't immediately able to comment.
"The overall market of the movie rental and purchase business is growing, but consumers aren't doing more of this as time goes by," Cryan said. "Within that context, the iTunes movie business is also growing, but it's taking on a smaller share of the growing pie."
Apple launched iTunes in 2003 as a platform for downloading music, before it added TV shows and movies for purchase in 2005 and, later, rentals in 2006. iTunes quickly became the blueprint for tech companies who wanted a hand in distributing music, movies and books on the internet, but it has struggled in recent years as a host of other music and video streaming services have emerged, especially subscription streaming services such as Netflix Inc. (NFLX) and Amazon Prime Video.
"There's a growing amount of opportunities in the way that there wasn't when iTunes first launched," Cryan explained.
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