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  • Analyst: Netflix Unscathed By iTunes Rental Service



    It appears that Netflix will remain the big bad wolf in the realm of digital rentals for the time being. According to Analyst Brian Marshall with Gleacher & Company, Apple's iTunes rental service has barely made a dent in Netflix and the growing market that the online rental juggernaut continues to cultivate.

    On Wednesday, Marshall proposed that Apple's iTunes rental service is roughly one-tenth the size of Netflix. Although Apple's offering (2005) is much newer than that of Netflix (1999), Apple sells fewer than 500,000 rentals daily via iTunes. Netflix, on the other hand, sees better than five million daily rentals. Apple's numbers may improve, however, given the rapid growth of Apple TV, which has now sold in excess of one-million units.

    Marshall estimates that 90 percent of iTunes TV viewings are rentals at an average selling price of 99 cents and that 75 percent of movie viewings are rentals at an average price of $2.99. Using those figures, the analyst gets a current quarterly rental revenue figure of more than $60 million.
    Of course, this is far from dismal news for Apple. “Over the past five years, Netflix’s subscriber base has quintupled while revenue more than tripled,” said Marshall in his note to investors. “If Apple can grow its related business similarly to Netflix’s historical growth profile, it is feasible iTunes’ annual rental revenue could exceed $1 billion by 2015.”

    CNBC
    This article was originally published in forum thread: Analyst: Netflix Unscathed By iTunes Rental Service started by Michael Essany View original post
    Comments 31 Comments
    1. CaptainChaos's Avatar
      CaptainChaos -
      Apple also has a ridiculous pricing scheme.
    1. zoso10's Avatar
      zoso10 -
      I'm going with Netflix they had the greatest movie of all time for instant watch: Mega Shark vs. Giant Octopus.
    1. Team Infecti0n's Avatar
      Team Infecti0n -
      Yeah I'll be making a final decision and support Netflix on this one in terms on quality and variation. New or not.
    1. bigboyz's Avatar
      bigboyz -
      My issue with iTunes "rentals" is that they are just that RENTALS....I don't want to be charged per movie or tv show!! Charge me a monthly subscription fee and i'm in...i never rent movies or shows from iTunes it's a rip off! You can rent movies for $1 a day now....COME ON MAN hahaha!
    1. CaptainChaos's Avatar
      CaptainChaos -
      Exactly. Launch a subscription and I'm in. With all of the "cloud" talk now a days Apple should be set up for this.
    1. hogcia's Avatar
      hogcia -
      I will explain why netflix is on top with ONE word.

      *PRICE!*
    1. Team Infecti0n's Avatar
      Team Infecti0n -
      Apple looks like is taking the Blockbuster plan. You pay for each and every rental...
    1. EskimoRuler's Avatar
      EskimoRuler -
      i love netflix, i watch 2 or 3 shows a day, that would cost so much on itunes, the streaming is the best part in my opinion, but it sucks that its older shows, nothing current
    1. StealthBravo's Avatar
      StealthBravo -
      Quote Originally Posted by Team Infecti0n View Post
      Apple looks like is taking the Blockbuster plan. You pay for each and every rental...
      Well we know how that worked out for Blockbuster...
    1. Cer0's Avatar
      Cer0 -
      Quote Originally Posted by EskimoRuler View Post
      i love netflix, i watch 2 or 3 shows a day, that would cost so much on itunes, the streaming is the best part in my opinion, but it sucks that its older shows, nothing current
      I watch a ton of episodes on NetFlix. Just signed up, not sure why I waited so long. So I got Hulu+ for new stuff and Netflix for other. Canceled cable because those two items are still cheaper than cable.
    1. StealthBravo's Avatar
      StealthBravo -
      Love hulu+ and Netflix