Netflix is perched atop the heap of digital content providers. And it doesn’t appear that anyone – not even Apple’s mighty iTunes – will change that reality any time soon.
On Wednesday, Brian Marshall – an analyst with Gleacher & Company – said Apple’s iTunes rental service is all but a virtual fly buzzing beside the head of Netflix.
Marshall published in a note to investors saying that Apple’s iTunes rental service represents roughly one-tenth of the business Netflix does. Apple sells fewer than 500,000 rentals per day via iTunes while Netflix enjoys better than five million daily rentals.
Marshall estimates that 90 percent of iTunes TV viewings are rentals at an average selling price of 99 cents and that 75 percent of movie viewings are rentals at an average price of $2.99. Using those figures, the analyst gets a current quarterly rental revenue figure of more than $60 million.
It is likely that Apple’s numbers will grow along with the burgeoning popularity of Apple TV. According to the latest data from Apple, the Cupertino-based tech giant has now sold in excess of one million units.
“Over the past five years, Netflix’s subscriber base has quintupled while revenue more than tripled,” Marshall noted. “If Apple can grow its related business similarly to Netflix’s historical growth profile, it is feasible iTunes’ annual rental revenue could exceed $1 billion by 2015.”