Netflix over 10 times bigger than iTunes rental service, says Gleacher analyst

By on Dec 29, 2010 at 1:44 PM
News December 29, 2010

Gleacher & Company analyst Brain Marshall claims that Apple’s digital video rental service available through iTunes is less than one tenth the size of Netflix’s rental business. Netflix, according to Marshall’s note on Wednesday, serves over 5 million daily rentals while Apple sells only about 475,000 rentals through iTunes each day. Apple has apparently not yet been able to translate strong Apple TV sales into significant revenue. Marshall believes that approximately 90% of Apple’s daily iTunes TV purchases are 99¢ rentals. He also believes rentals, which average $2.99, make up approximately 75% of movie viewings bought through iTunes. Apple’s revenue from iTunes rentals is estimated at approximately $60 million per quarter, however, while Netflix reported $553 million in revenue in the third quarter of 2010.

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  • Jeffbschmidt

    It’s not the same service. It takes an hour to download a rental from iTunes- streaming netflix is gonna blow it away

    • Mrjlw2480

      On the new version of Apple TV iTunes movies are now streaming along with being able to stream Netflix. It no longer takes an hour+ to download an iTunes movie with the new Apple TV.

    • http://twitter.com/nickdube Nicholas Dubé

      Yeah took about 5 minutes before I could start watching my rental of Easy A in HD with DD5.1. I think that new Data centre combined with AppleTV g2 offer some vast improvements – ones you seem to be quickly negating for the purposes of your argument.

  • http://pulse.yahoo.com/_GP2WYAHXS6CRUREISWBGPUSUGE Michael

    I can hear the fanbois now

    This cannot be possible, Netflix is fragmented, you have Apple TV, Bluray players, Wii, Playstation, Xbox and countless other means of streaming this….. and doesn’t have Steve Jobs stamp of approval. How can something out do what apple has done. I mean this is just weird something isn’t right can you please double check your numbers. Steve Jobs is second to no one.

    sorry i just needed to vent a little.

    • AndroidWins

      I completely agree with you on this. It just goes to show you that people buy apple crap just because it has an apple logo. Jobs could polish a turd, put an apple logo on it, and people would buy it.

      • Goofan (aka Apple Hater)

        That’s right AndroidWins. We are smarter than that and buy anything that says Google or Android which widens our horizons quite a bit.

      • AndroidWins

        I don’t buy only Google or Android; I buy what ever gives the best options and freedom, and right now that happens to be Android. I’m not brainwashed like apple buyers, who buy their crap just because it is made by apple. It’s your choice if you want to waste your money on apple crap instead of looking at what is best. Staying loyal in the tech world will get you burned, but apple fans are too blind to see that.

      • Goofan (aka Apple Hater)

        I am agreeing with you. We love all Google stuff and believe everything they say, like you are suggesting. I am with you brother and fellow Goofan (aka Apple Hater). We love HATING Apple and it’s our favorite sport. Name me one, JUST ONE, good product Apple has built! I bet you can’t!

      • Anonymous

        Um.. I buy apple crap, xbox crap, directtv crap, netflix crap.. Maybe I’m just a consumer.. Get what ya like folks.

      • Anonymous

        Haters gonna hate.

    • Anonymous

      Why don’t you DroidLames get a grip!!! It’s not that serious… Apple fanbois spend more time enjoying life than hoping every single Apple product is a roaring success.

      Go get a girlfriend you lame!… while your at it go purchase an Iphone!

      • AndroidWins

        Why don’t you apple farries quit massaging job’s tip and swallowing everything that comes out of it?

      • Anonymous

        Whatever you say google boy… just as soon as you stop getting your head blown from spinning off of both schmidt’s and rubin’s tip! your trash, go pick yourself up a new shiny macbook pro and do something with your self!

      • jondo

        Jobs rules! you WISH you could matter a fraction as much as he does. you are just an insignificant hater.

      • http://pulse.yahoo.com/_GP2WYAHXS6CRUREISWBGPUSUGE Michael

        Hey Mr. The iKing. I never said anything about Android in my post. I never said anything anything related to Mobile Platforms. So why don’t you read my post again and post something intellectuality sound this time. You are reading BGR, i know you are smart, but we need something constructive.

      • Anonymous

        I don’t want to read through your crazy ramblings about Steve Jobs ever again DroidTard! Yes, I know you’re one whether you mention it or not. I also know that you can’t prove me wrong either Mr.Michael.

      • http://pulse.yahoo.com/_GP2WYAHXS6CRUREISWBGPUSUGE Michael

        mr the_iKing… i don’t have to prove you wrong, you just a good job of proving yourself wrong..

      • Anonymous

        I bought my girl an iPhone.. Got one peepee touch.

      • smooter

        @CoolerThanYou – Then my friend you bought an iPhone for the right reason! :-) ROFL

  • Tom

    I upgraded my two first generation AppleTV’s I bought when they came out to the newer second generation AppleTV’s a few months back.

    Loved the AppleTV so much we dumped cable TV (at $104 per month!!) just almost a year now.

    We always bought a lot of movies and TV subscriptions from iTunes, So the purchase and the AWEFUL amount of commercials all over cable and TV shows – why we dumped Cablevision.

    With the new version of AppleTV I tried the Netflix free trial offer. Wow. Signed up for a year it is that good. I have to figure Apple, Google or Microsoft HAS to be thinking of buying Netflix. That’s how impressed I was. And I don’t get impressed regarding easily.

    People shold buy the AppleTV for Netflix first and foremost. I love the AppleTV. ANd really love the integration of the iPhone 4 with it. Pretty cool.

    But Netflix is the selling reason for AppleTV.

    • Anonymous

      Well if Netflix is your big draw to Apple TV why did you not get Roku boxes where you can buy from more than one place and have app’s/channels that Apple does not offer?

      I would be interested to know also what your actual yearly budget including equipment is Vs cable that you dumped. With a DVR thats a lot of on demand add free content from cable along with their own on demand stuff. I still see À la carte TV as more expensive when you add total cost of OTA, Internet and programming costs and equipment.

    • Anonymous

      Netflix works because it is a flat rate and all you can eat, so to speak. Apple offers one at a time, and that seems to add up.

  • Anonymous

    Eh… don’t they get it by now? $7.99 a month for unlimited streaming of TV shows and movies is a better deal than $0.99 per TV and $2.99 per movie.

    • AndroidWins

      They don’t get it, that is why apple charges that and people will pay it – because it is apple.

    • http://pulse.yahoo.com/_BHMB52ZFMATI5KS7D4JT6UU7NA Eric W

      You are right, but there is a lot that isn’t available on netflix streaming, so I still do the 1 DVD at a time deal with them.

      • Anonymous

        $9.99 is still better than Apple’s model…

      • http://pulse.yahoo.com/_GP2WYAHXS6CRUREISWBGPUSUGE Michael

        yip… 9.99 per month for UNLIMITED Netflix of 10 Apple TV shows, or about 3 movies…. let me think.

  • Anonymous

    Apples (npi) to oranges anyone? Netflix streaming is a fixed price service. Apple rentals are pay-as you go. Netflix is streaming. Apple is rent and download. Apple rental revenues can’t be compared to netflix instant revenues, because netflix revenues also include DVD/BD service. In addition, revenue itself is not a good indicator here – profit would be best, because you can bet netflix is paying an arm and a leg for the rights to stream all of the content it streams; whereas apple most likely has per-rental deals for its content.

    • Anonymous

      You can take away DVD/BD service and I bet Netflix streaming sales alone will blow iTunes rental away. Why wouldn’t we compare Apple’s rental revenue to Netflix’s instant revenue? They are direct competitors selling the same product, only difference is payment system – monthly compared to per download. It’s like saying we can’t compare 2 chinese restaurants, because one is All-You-Can-Eat and the other is per plate. If both have the same menu and both are of equal quality, why wouldn’t you pay per plate? With AYCE you can eat as little or as much as you want. Food is food, no matter how you pay for it.

  • Tech_User

    in other words……….apple tv is still a failure

    • Goofan (aka Apple Hater)

      That’s right. @Tech_User, please tell these guys what a truly successful product is!!!! Only Google knows how to make products that the world wants and loves. Google TV for one, is spectacular and the fact that ALL reviews from key guys like Pogue, Mossberg and the likes have been terrible (we know why, those guys are NOT VERY SMART), it’s still the product that will OWN TV in the next 6 months.

  • Oh Mr. Yes

    no effin ish that apple tv is one tenth that of netflix’. I don’t even know why such a comparison is drawn apple tv is a baby compared to netflix based on the two obvious (or what should be obvious) points:

    1. longevity of netflix compared to apple to build a user-base that its sole purpose is movies and television. Yes there are a few people that use and prefer apple products that do use the service hence the sales. Serious movie and television folks use netflix.
    2. pricing structure individually via apple or a monthly rate for all via netflix

  • Anonymous

    Come on everyone knows that, even the Apple tv supports Netflix. It’s also a dumb comparison cause iTunes doesn’t offer a mail in service like Netflix. iTunes is ala carte while Netflix is a subscription service that’s been around for years. They’re 2 dirrent business models, iTunes delivers online rentals for new content, Netflix doesn’t. Netflix offers rental by mail of new release content and iTunes doesn’t do that, they’re 2 different things.

  • Mrcygnus

    Until Netflix becomes a superior on-demand type service, it will continue to sink into obsolescence…and don’t think for two seconds that Netflix isn’t painfully aware of this fact. Hopefully they step up their game. The instant watch feature is great, and works well, but the titles are beyond bad.

  • http://twitter.com/nickdube Nicholas Dubé

    I would argue that Netflix is also more established, available on a greater diversity of platforms and has a model which makes it very hard to compete with. As I now own an Apple TV (g2) and have been using netflix for months now I can say they are different in what they offer the customer – mainly because Apple TV offers new releases and purchases of TV shows (through itunes first) while Netflix is more of a collection of “yesterdays hits”

    Mind you I am speaking as a Canadian who has a limited experience on both platforms but still – netflix is bigger and understandably so because it has the potential to reach far more viewers and it is positioned as an unlimited platform. There are days I watch 5-10 tv shows on netflix, certainly pushing up the average of “rentals” they receive.

    I believe WOZ mentioned that he see Apple winning the phone war in terms of revenues and profits because of how it controls its “markets” better, thus creating a long term “winner.” I think many could argue that Apple TV COULD win this battle as well (revenue) because operating on a system of unlimited everything for 8 bucks a month without any other streams of revenue (that I know of) seems quite impossible for the long term.

    Just my thoughts,

    in closing I love both for who and what they are – not what they are not and not for how they compete but how they compliment one another.

  • Anonymous

    I have Netflix, and if they don’t start carrying better titles on there online service, I am dropping them like a bad habit.

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