Though it is half as old as Netflix, Apple’s iTunes rental service is believed to be about one-tenth the size of the competing rental service, analyst Brian Marshall with Gleacher & Company has told clients in a note, as reported by “AppleInsider” (http://www.appleinsider.com). He thinks Apple sells about 475,000 rentals daily through iTunes, compared to the 5.1 million daily rentals seen by Netflix.
Marshall estimates that the iTunes rental business for TV shows and movies is larger than sales of purchases. He estimates that rentals generate more than US$60 million in revenue per quarter, while purchases account for about $50 million. Netflix reported revenue of about $550 million in September.
Apple says iTunes users are renting and purchasing over 400,000 TV episodes and more than 150,000 movies per day. Marshall thinks that about 90% of iTunes TV viewings are 99-cent rentals, while 75% of movie viewings are rentals with an average selling price of $2.99. Applying those estimates to Apple’s provided numbers results in a daily total of 475,000 rentals.
Some folks think that Apple should buy Netflix. Perhaps it will. Or perhaps it will simply evolve iTunes into a Netflix competitor using the massive data center being build in North Carolina.
— Dennis Sellers