Apple's iTunes is still the leading online movie market

Research by IHS Screen Digest shows that, despite the increased competition from competitors such as Microsoft and Wal-Mart, Apple’s iTunes successfully maintained its dominance in the United States' movie network distribution (EST) and Internet video on demand (iVOD) markets in 2010.

In 2010, Apple's iTunes online digital media store accounted for about two-thirds of the US EST/iVOD movie consumer spending, with a share of 64.5%, down from 74.4% in 2009. The company controlled three-quarters of its share in the US EST field in 2010. Consider the field 2010. With a substantial expansion in the year, Apple’s market share is even more striking. 2010 EST/iVOD movie revenue increased by more than 60%.

Last year, the iTunes online store displayed tenacious competitiveness in the US EST/iVOD movie market. Not only did it repel many challengers, but it also followed a strong expansion of the overall market. Apple faces Microsoft Zune Video and Sony PlayStation Store challenges, as well as Amazon and Wal-Mart threats. However, due to the launch of the iPad and the second generation of Apple TV, iTunes still managed to achieve growth. Apple TV promoted the company’s movie rental business and stimulated the development of the iTunes multi-screen ecosystem. IHS expects that in the US market, Apple’s strong performance in iVOD will continue to exceed the video-on-demand service provided by many large cable operators.

Table 2 shows the market share estimates of IHS Screen Digest for major US EST/iVOD movie providers in 2010, ranked by consumer spending share.

The major brands constitute a powerful competition. Due to the success of the Kinect 3-D somatosensory control system for game consoles, the competition between EST and iVOD from Microsoft in 2010 has significantly increased. This led to a significant increase in movie revenue for the Zune Video platform in the fourth quarter, consolidating Microsoft’s second-place status. In 2010, Microsoft accounted for 17.9% of US consumer spending on EST/iVOD, up from 11.6% in 2009.

In 2010, Sony ranked third in the US market, with its market share rising from 5.7% in 2009 to 7.2%. However, the company faces greater competition from Amazon VOD and Wal-Mart Vudu services in the United States.

Wal-Mart Challenges Although these large-scale manufacturers continue to increase the competitive pressure on Apple, the most terrible opponent of iTunes in the future may be Wal-Mart. Wal-Mart is a large-scale retailer and in 2010 it was only a small player in these areas.

Wal-Mart has aggressively expanded its U.S. online movie business Vudu’s market share, which has seen a significant increase in consumption from the fourth quarter of 2010. The company announced a $0.99 promotional price for iVOD movies and supports a variety of living room electronics, including Sony's PlayStation 3.

The future of online movie business may be attributed to the fight between Apple and Wal-Mart. Although Wal-Mart is not outstanding at present, if it maintains its current development momentum, it will soon become a major competitor. Because Wal-Mart's Blu-ray and DVD movies have sold a lot, the company has become an important source of revenue for Hollywood studios. Wal-Mart is now expanding its video sales operations into the online space.

According to a study by IHS Screen Digest, Wal-Mart sold more than 3.5 billion U.S. dollars in revenue for movie studios through its sales of physical videos in 2010.