Joseph O'Halloran ©RapidTVNews | 23-08-2011

Even though there were murmurings of competition from other players throughout the first half of 2011, the iPad phenomenon has enabled Apple’s iTunes to preserve its pre-eminence in the US online movie market.

According to new IHS Screen Digest Media Research Data, the US Internet video on demand (iVOD) and electronic sell-through (EST) business in the first half of 2011 amounted to $229 million, with EST accounting for $118 million and $111 million for iVOD. For the full year of 2011, IHS predicts the market will rise to $487 million, with EST representing $247 million, and iVOD taking up $240 million.

Out of these, IHS calculated that iTunes accounted for nearly two-thirds (65.8%) of US consumer spending for movie EST and iVOD, up from 64.9% for the same period in 2010. The increase compares very well to the first half of 2010 when the iTunes share actually declined by 11.9 points year-on-year.

The nearest competitor, Microsoft with its Zune video marketplace, held only a 16.2% share with traction diminished by the end of a surge in sales of the Kinect motion controller for the Xbox. Behind Zune was the fast growing Wal-Mart Vudu which finished with a 5.3% share, more than five times that recorded twelve months earlier. The biggest fall was Sony with its PlayStation Store whose share almost halved year on year to 4.4%. The drop was attributable mainly to cannibalisation by Vudu.

“iTunes’ expansion of its market lead represents a remarkable achievement in light of intensifying competition from a slew of aggressive rivals,” explained Arash Amel, research director, digital media, for IHS. “Much of iTunes’ success can be traced to the rising usage of Apple’s AirPlay system, which allows wireless video streaming to consumer electronic devices including televisions. This has expanded the reach of iTunes to new platforms, boosting sales of movies from the system.”

IHS also stated that in the current economic climate, consumers are more interested in accessing movies than in owning them and that because of this, growth in EST has virtually stopped.