Blog Post

iTunes Movie & TV Run-Rates Down in ’07

Apple sold each movie in its library about 10,000 times last year, and each TV show in its library 160,000 times. Both figures showed decreases from their 2006 equivalents: 13,000 movies sold, and 200,000 episodes of television sold, according to analysis by Convergence Consulting.

iTunes video sales stand in stark contrast to its music sales, which reportedly recently surpassed Wal-Mart. Last year we suggested “five fixes for Apple’s iTunes Video Woes“; of those, only rentals have been implemented.

Convergence measured the average number of videos for sale on iTunes throughout the year (e.g. 575 in 2007) and divided it by the released sales figures (e.g. 5.7 million movies sold in 2007). (Apple only started selling TV shows and videos in the last few months of 2006.) Reduced numbers of sales per item are what you’d expect when a store fills out its inventory, but 575 titles is hardly long-tail material.

“Rentals happen because sales are not going anywhere,” Brahm Eiley, president of Convergence Consulting, told NewTeeVee. “These run-rates really go a long way to explaining why they moved to the rental business in the beginning of this year.”

In its report, Convergence reasons that paid video content doesn’t make economic sense:

For major content players bypassing the cable, satellite, telco TV distributors, and selling direct to the consumer is an economic dead-end. The average TV subscriber home pays $64/month and watches 250 hours of TV, equating to $.25/hour. Apple’s run-rate for TV shows ($2 price) sold in 2006 was just 200,000 episodes per TV show, in 2007 this declined to 160,000 episodes per show (per show revenue is underwhelming, equating to an average 30 second TV ad).

Today we also covered Convergence’s estimates for online streaming of TV.

3 Responses to “iTunes Movie & TV Run-Rates Down in ’07”

  1. I will not use i-Tunes for my TV or movie viewing until the prices start to reflect what I can do with out i-Tunes. Apple can get me to pay a little extra for their hardware, but do they really think I am going to pay 3 dollars extra to rent a movie? I can ride my bike to a RedBox and get a new release for 1 dollar. Or I can go to the library and get one for free. If they did a subscription based service I might think about it, but then again it would need to be cheaper than Netflix for me to do it.