Recent market research from the NPD group shows that Appleâ€™s iTunes video delivery is in a three-way tie for third place at only 4% market share, while Netflix is way ahead at 61% and Comcast is second at 8%.
I don’t trust market research. Precisely because I was a market research analyst for a few years. Just keep your eyes open and read everything with a grain of salt. So, NetFlix streaming probably is leading, but I doubt it is dominating like NPD has reported.
We know that at the end of 2010 the number of Apple TV boxes hit one million. Contrast that to 20 million NetFlix subscribers at the end of last year with a little more than a third of new subscribers paying for streaming-only. NetFlix added 7.7 million new subscribers in 2010 with a stream-only option that started in November. That’s a monthly rate of 640 thousand new subscribers. Assuming 30 to 40% of NetFlix subscribers stream, the total number of streaming subscribers are between 6 to 8 million.
If NetFlix has a 61% market share that would put Apple TV at 7.6 to 10.2%. If Apple TV’s share is accurate at 4% then NetFlix is around 24 to 32%. For NetFlix to have a market share that’s more than 15 times larger than Apple TV’s the percentage of NetFlix subscribers who stream will need to be 75%. Too high in my opinion.