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Tech Report: Netflix Overtakes Apple In Online Movie Service Revenue

SAN FRANCISCO (KCBS) – Despite an up-and-down year, according to market intelligence firm IHS iSuppli, Netflix has become the largest U.S. online movie service based on revenue in 2011.

IHS found that Netflix's market share grew to account for 44 percent of the domestic online movie market in 2011, up from less than 1 percent in 2010.

Meanwhile, previous market leader Apple saw a precipitous drop last year, falling from 60.8 percent of the market in 2010 to 32.3 percent in 2011.

KCBS Technology Analyst Larry Magid:

IHS officials said the numbers are likely to change over the next few years as the online movie business continues to flourish and grow. It more than doubled in 2011, reaching $992 million and is expected to double again this year.

The good news for Netflix comes as a new IHS iSuppli report found that U.S. households decreased their spending on physical media purchases and rentals at double-digit rates last year.

The firm expects the market to continue to grow, with challengers like Hulu and Wal-Mart-owned Vudu making waves as well.

You can hear Larry Magid's Tech Report Monday through Friday at 3:50pm on KCBS All News 740AM and 106.9FM.

(Copyright 2012 by CBS San Francisco. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)

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