Netflix’s subscription model outperforms Apple in online movie market

Netflix surpassed Apple as the largest online movie service in terms of revenue for 2011, according to a new report by IHS iSuppli. This transformation in the industry was largely driven by the increased demand for subscription services, allowing individuals to pay per time period, rather than per movie.

“2011 marked a sea change in the online movies business that saw the balance of consumer spending shift from a DVD-like transactional model to more TV-like subscription approach,” IHS digital media research director Dan Cryan said. “The online movie business more than doubled in 2011 to reach $992 million and it is expected to double this year as well.”

The study revealed that Netflix accounted for 44 percent of the online movie market in 2011, compared to less than 1 percent in 2010. Conversely, Apple made up slightly more than 32 percent of the market in 2011, a significant drop from its controlling share of more than 60 percent in 2010.

Additionally, Netflix CFO David Wells recently said the company plans to roll out a new plan that will allow its subscribers to stream movies on multiple devices, according to Home Media Magazine.

This will likely contribute to Netflix’s growing popularity in the coming years as more consumers leverage subscription-based services for video and other new media content.

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The Forrester Wave: Subscription Billing Platforms, Q4 2015

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