Netflix and Blockbuster are in trouble because of iTunes

Today Apple announced that they have sold 5 billion songs. And now they sell or rent over 50,000 movies per day.

A while ago it is said that Netflix has 8 million subscribers. I believe many of those subscribers are not subscribed to unlimited plan. So a conservative estimation is, every customer rents 3 movies a month. That’s 24 million movies per month.

However, Apple sells/rents 50,000 movies a day. That’s 150,000 movies a month. iTunes has a market of 1/160 the size of Netflix. And that’s when iTunes has just started, and iTunes has only a little over 2000 movies, compared to about 100,000 titles of Netflix which is about 50 time bigger. Note that both of them have some quite old titles, so the selection of new titles is not a major issue. That is to say, Apple uses 1/50 of Netflix’s collection, and get 1/160 of Netflix’s rent amount. That’s impressive for a young service.

I used to subscribe to Netflix or Blockbuster. But they are not flexible, as I HAVE to rent a certain amount of movies so that my money is well worth it. Now I don’t have to . I just need iTunes to rent movie when I really need it. With better selection, iTunes will ultimately be a better choice for people who don’t want to watch a certain amount of movies a month.

And yes, Netflix is in trouble. Blockbuster has been in trouble for a long time because of Netflix.

Leave a Reply

Your email address will not be published. Required fields are marked *