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Summary:

Apple’s share of the online video sales market is on the rise again after a falling considerably due to new competition, a new study reveals. The market share growth is small, but it also brings increased revenue and a roadmap toward more growth in the future.

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Updated. Apple’s share of the online video sales market is on the rise again after a falling considerably due to new competition, an IHS iSuppli study revealed on Monday. Apple’s market share rose slightly from 65.9 64.9 to 65.8 percent during the first half of 2011, when compared to the same period in 2010. It’s a small increase, but it reverses a negative trend and also brings the largest increase in revenue for any online video retailer.

IHS cited the “rising usage of Apple’s AirPlay system,” which allows streaming of video from Apple’s mobile devices or computers to the Apple TV, as one of the primary sources for the increased popularity of Apple’s iTunes service, and also pointed to the “growing installed base of the iPad and price promotions” as causal factors. Both are new introductions since Apple experienced a dip of 11.9 percentage points year-over-year between 2009 and 2010.

Also introduced during the recovery period was an improved Apple TV model, which is a key component for AirPlay, and which also provides easy access to Internet video on demand content through iTunes rentals. Apple recently introduced the ability to view purchased iTunes TV shows via streaming from its servers on the Apple TV, too.

Two of Apple’s strongest competitors, Microsoft’s Zune video marketplace and the Sony Playstation Store both experienced considerable drops in market share during the first half of 2011, as compared to the same period in 2010, but Walmart’s Vudu service, which recently introduced a web-based iPad streaming app to avoid Apple’s sharing revenues with the iPhone maker, gained a lot of ground, and Amazon VOD grew slightly as well.

Based on these numbers, there’s a fairly clear avenue for Apple to take for continued growth: Make sure video purchased through the iTunes Store is available to any and all of the company’s devices, and make it easy to share content from one device to another. If it can manage to secure a deal with content providers like the one that allowed iTunes in the cloud to back-up and share music across devices, that would be a good next step.

  1. Apple’s market share rose slightly from 65.9 to 65.8 percent during the first half of 2011, when compared to the same period in 2010.

    Sounds like a decline to me.

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  2. “65.9 to 65.8 percent” is actually a drop of 0.1%

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  3. ‘Apple’s market share rose slightly from 65.9 to 65.8 percent during the first half of 2011, when compared to the same period in 2010.’
    Not sure how that turns out to be an increase?

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    1. As usual, our commenters are faster than we are! That was a typo, not incorrect math. We’ve updated the article with the correct figures, and it was an actual increase.

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  4. Is this the US market or global market share? Is this market share based on dollar value or number of videos bought or rented or streamed? Do you happen to know the dollar value of this market? 65.8% seems very high, does this include services like Netflix etc.?

    Its not clear to me what market share the article is discussing.

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