Microsoft’s Zune Video bites healthy chunk out of Apple’s online movie share

By Tom Warren, on 9th Feb 11 2:30 pm with 9 Comments

Zune Video in the U.S.

Microsoft’s Zune Video service gained over 50% more market share in 2010 compared to 2009.

The software giant’s Zune video platform now accounts for 17.9% of the market compared to 11.6% in 2009. Microsoft has successfully cemented its U.S. number two market rank during 2010. Apple’s iTunes still dominates the market with 64.5% market share but due to increased competition from Microsoft, Sony and others, Apple’s share slipped by 13%. U.S. movie EST/iVOD consumer spending on iTunes movies was 74.4% in 2009, meaning Apple’s share has slipped by nearly 10 percentage points.

The figures come courtesy of the latest quarterly analysis from IHS Screen Digest. “Apple faced serious competition from Microsoft’s Zune Video and Sony Corp.’s PlayStation Store, as well as from Amazon and—most significantly—Wal-Mart,” said Arash Amel, research director, digital media, for IHS. Despite Apple’s competition the company still dominates U.S. EST/iVOD movie consumer spending. The company also maintained its control of three  quarters of the U.S. EST business in 2010.

Microsoft’s sharp increase can be attributed to the successful launch of the Zune Video services on the Xbox 360. Microsoft launched its Zune Marketplace on the Xbox 360 in November 2009. The service features content from CBS, Fox, NBC, Viacom, PBS and others. Following the success in the U.S. Microsoft expanded its offering in October to additional countries in North America, Europe, Asia and Australia. IHS Screen Digest notes that Microsoft’s Kinect launch and its Xbox 360 sales success have helped it gain on Apple. “This resulted in a bumper fourth quarter for movie revenue on the Zune Video platform.”

Latest Microsoft Video share - IHS

  • Anonymous

    I hope MS does a little advertising for zune one of these days… They really need to also get competitive on pricing/discounting and integrating the content with 3rd party hardware. – for example create a zune service for Roku devices and BD players – so on and so forth.

    • Anonymous

      Interesting idea. Do you think they can get away with this without updating the Zune hardware? I think that’s the weak link in the Zune framework. MS seems almost scared to really take on the iPod market as they haven’t updated Zune hardware or shown any interest in updating it for some time.

    • Anonymous

      The stand alone zune hardware has been little to no growth for the zune brand. I used zunepass for 2+ years even without a zune device.. and I’ve only used zune video on my xbox 360 and pc (and now windows phone..)

      With windows phone on the table, i don’t think a stand alone player is really that viable.. they will do zune eco system on wp7, windows 7, whatever tablets they ahve and xbox 360 but they really need to push it on the growing tv platforms that have amazon/netflix services already to remain competitive

    • Anonymous

      Good point about WP7, although things are look pretty soft there right now too (I am one of the few WP7 users). I think my concern is that there isn’t enough hardware in people’s hands to make Zune really useful. Xbox is not enough to make Zune really stick, but that could change soon. I guess that’s where the advertising comes in.

    • Anonymous

      Thats where you need to expand the platform to roku/tvs/stbs.. Don’t forget though, ms had what 40+ million xbox 360s out there, 2+ million Windows Phones (more by now i’m sure..), xxx hundred million windows 7 licenses sold so on and so forth.. they just need to bring everything together and leverage the brand and get price competitive – which is hard being at the mercy of distribution/licensee price fixing

  • Anonymous

    I never thought about it liek that before. Makes sense.

    http://www.net-privacy.at.tc

  • http://www.timacheson.com/ Tim Acheson

    Don’t underestimate Zune!

    I’ve said it before, and I’ll say it again:-

    http://twitter.com/timacheson/status/22874929169

    There’s a tendency in certain circles to dismiss Zune and even laugh at it, but these people are invariably confusing one experimental devide with a much broader brand — whether they do so deliberately or through genuine ignorance.

  • http://twitter.com/adam_hartung adam_hartung

    Wrong headline! Should read Apple maintains 4x Microsoft share after nearly decade of competition! According to Forbes, Microsoft’s strategy to defend the PC has cost it deeply by ignoring other fast growing markets – like this one http://bit.ly/hZOlt1

  • http://twitter.com/adam_hartung adam_hartung

    Wrong headline! Should read Apple maintains 4x Microsoft share after nearly decade of competition! According to Forbes, Microsoft’s strategy to defend the PC has cost it deeply by ignoring other fast growing markets – like this one http://bit.ly/hZOlt1