Users are increasingly making a shift from the traditional sources of entertainment toward the Internet-based viewing, and this mass transformation has immensely benefited Apple Inc. (NASDAQ:AAPL) and Netflix, Inc. (NASDAQ:NFLX).
Though there is no doubt that the online video segment offers mammoth opportunity, there is an uncertainty that between Apple Inc. (NASDAQ:AAPL) and Netflix, Inc. (NASDAQ:NFLX), which one is a bigger player.
There is actually no definite answer to that, but it depends on the type of content delivery method, says a report from Wallstcheatsheet by Nathanael Arnold.
Apple Winner In Video Downloads
Apple Inc. (NASDAQ:AAPL) is a clear winner, when it comes to video downloads. The iPhone maker, in a press release recently, revealed the download rates for the movie and television shows. The company told “iTunes users have downloaded more than one billion TV episodes and 380 million movies from iTunes to date, and they are purchasing over 800,000 TV episodes and over 350,000 movies per day.”
According to the data from research firm NPD Group, in 2012, for the TV show download market Apple Inc. (NASDAQ:AAPL) accounted for 67 percent while for movie download market it held 65 percent share. The second place was held by Microsoft’s (NASDAQ:MSFT) Xbox with 14 percent of the download market for TV shows and 10 percent of the market for movies.
Netflix Leader In Subscription-Based Video Streaming
In the subscription-based video streaming market, Netflix, Inc. (NASDAQ:NFLX) is the clear winner. As per NPD Group, in the first quarter of 2013, for the subscription video-on-demand market, Netflix held 90 percent of the share.
Subscription-based video streaming has been the most popular among consumers. According to NPD data, in the first quarter of 2013, 19 percent of the consumers used the subscription-based service like Netflix, Inc. (NASDAQ:NFLX) to watch a movie versus only 5 percent who used a video download service like iTunes. Also, around 74 percent of the users purchased or rented a Blu-ray disc or DVD. Though Apple Inc. (NASDAQ:AAPL) does not offer subscription-based video streaming service, it allows Netflix and Hulu services from its Apple TV digital media receiver.
Apple A Potential Threat
However, if Apple Inc. (NASDAQ:AAPL) plans to foray in the subscription-based video streaming segment, it has the potential to challenge the dominance of Netflix, Inc. (NASDAQ:NFLX). According to an NPD analyst, iTunes enjoy a good customer satisfaction metrics.
Also, the new deals bring HBO GO and WatchESPN to all Apple TV users who have access to those channels. Allowing HBO GO to Apple TV reflects that parent Time Warner Cable Inc (NYSE:TWC) has plans to expand beyond a handful of other devices, which can hamper Netflix, Inc. (NASDAQ:NFLX)’s distribution advantage.