iTunes Store Losing out in Battle for Video Amid Growing Competition

Citing people familiar with the matter, a report by The Wall Street Journal is claiming that Apple’s iTunes store is losing the battle for video viewers, with Amazon having the biggest impact on the iPhone maker’s market share for renting and selling movies. Apple’s share has tumbled to between 20% and 35% from well over 50% as recently as 2012. Several Hollywood studios, who do different amounts of business with Apple, have reported a marked decline in iTunes’ leadership position.

Itunes video

Amazon, which in addition to its Prime subscription service rents and sells movies on a “transactional” basis, has had a significant impact on iTunes video. According to studio executives who are involved in home-entertainment sales, say that Amazon’s market share in the business has recently risen to around 20%. Meanwhile, Comcast which has long rented movies on its set-top boxes and in late 2013 began selling digital copies as well, has also gained 15% share of the combined market.

“Comcast and Amazon have been quite aggressive of late and taken quite a lot of the business,” said Dennis Maguire, a former president of home entertainment for Viacom Inc.’s Paramount Pictures.

In addition to steeper competition, Apple faces broader changes in the movie rental and sales market as consumers increasingly watch movies and TV shows offered through streaming-subscription services from Amazon, Netflix Inc. and others. Their popularity is a big reason why video-on-demand movie rental revenue in the U.S. declined 4% to $1.8 billion last year, the first year it has dropped in recent memory.

An Apple spokeswoman on the other hand has told WSJ that the company is focusing 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.

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  • Brenda

    The problem with iTunes is the limited selection. But, in Canada, Amazon isn’t much better. I sometimes have to order region 2 DVDs from Amazon UK (Royal Mail seems faster than Canada Post) then rip them to media storage. Not sure if it’s outdated copyright and/or Canadian content regulations or the small size of the market, but it is very hard to legally watch what you want in this country.

  • thomaus

    Coincidentally, last night we purchased a video and watched it off iTunes (Stop Making Sense). Halfway through the movie, it stopped with a dialog about the screen not being authorized to view the HD content. We play movies off a Mac Mini, connected to a multimedia amp and then to a plasma monitor. This setup works fine for all the other methods we’ve used to view movies and TV shows, and we’ve never seen this happen except using iTunes (we use various other sources: Netflix, VLC, Apple TV). It’s not a great customer experience when you actually pay for something and it malfunctions, as opposed to ‘stealing’ it and it would have played flawlessly. We clicked around in the video settings, restarted iTunes, and it started playing again. And it probably would have played fine using the Apple TV. But it’s not the sort of thing that makes you want to shop there again.

  • Chrome262

    iTunes is cheaper then Rogers on demand by a dollar, so its an option we use occasionally. But with Netflix and streaming options I can see why they are getting less business. But for those cutting cable, subscribing to a show on iTunes can be cheaper in the long run. Especially with Toronto Rogers pricing, sheesh