Amazon and other competitors are hurting iTunes movie sales and rentals

Strong competition from the likes of Amazon and Comcast has halved Apple’s market share when it comes to movie sales and rentals, The Wall Street Journal reported yesterday.

The numbers should be taken with a grain of salt because, as the article states, no third parties track market share in the digital-movie business. While that makes exact figures impossible to obtain, Hollywood majors do different amounts of business with Apple and several of them have confirmed “a marked decline in iTunes’ leadership position.”

Sources said iTunes’ market share for renting and selling movies has been falling for years, tumbling to between 20 percent and 35 percent from well over 50 percent as recently as 2012.

By comparison, Amazon’s market share in that business has recently climbed to around 20 percent, studio executives said. As for Comcast, it now claims about 15 percent of the combined market for movie sales and purchases in the US.

Bernstein Research estimates that iTunes video, music, book and magazine sales in 2016 accounted for an estimated $4.1 billion in revenue, making it the second-largest services business behind App Store sales.

Apple says it’s focused on providing users with premium entertainment via video apps on App Store. The company takes a fifteen percent cut on subscriptions sold via App Store.

An excerpt from the article:

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.

It is no secret that video-subscription services are growing in popularity at the expense of on-demand rentals and movie purchases. Why pay five bucks or more to stream a single movie via iTunes in high definition if you can get a full Netflix or HBO NOW subscription for the price of a single movie download (new movie downloads are priced at $19.99 on iTunes)?

Movies, like music, are meant to be streamed no matter what Apple says about it.

Just like iTunes’ market share for digital music purchases has been decreasing as part of the overall industry decline due to the rise of streaming services like Spotify, the same thing is now happening in the digital movie industry.

Apple has offered movies and TV shows on iTunes since 2003.

Apple has been trying for years to persuade Hollywood studios to let it build a so-called skinny bundle of the best channels from the likes of Disney, ESPN and others, to no avail.

Last year, total digital-movie sales and rentals rose a combined twelve percent to $5.3 billion in the US, according to PricewaterhouseCoopers.