Netflix Passed Apple in Internet-Movie Revenue in 2011

Netflix Inc. (NFLX) passed Apple (AAPL) Inc. in U.S. online-movie revenue last year, fueled by booming demand for streaming-video subscriptions, research firm IHS said.

The Los Gatos, California-based company’s share of U.S. consumer online-movie sales jumped to about 45 percent last year, IHS said today in a report. Apple saw its share fell to 32 percent from about 61 percent.

Netflix split its Internet-streaming service from its DVD- rental plan last year, making it easier to track revenue from online users. It charges customers $7.99 a month to watch unlimited movies and TV shows, which are delivered instantly. Apple’s iTunes, in contrast, charges for programs individually.

Netflix used to offer its streaming and DVD mail-order services together for $9.99. When the company split the package into two $7.99 options, the move irked some customers and led to cancellations and slower growth. Still, the streaming part of the industry is poised to more than double to $1.1 billion this year, Englewood, Colorado-based IHS predicted.

Prospects for movies purchased one at a time -- as is the case with iTunes -- aren’t as strong, the firm said. That market grew 2.4 percent last year to $236 million, IHS found.

Netflix’s stock declined less than 1 percent to $62.95 at the close in New York. Shares of Cupertino, California-based Apple dropped 2.9 percent to $560.99.

To contact the reporter on this story: Nick Turner in New York at nturner7@bloomberg.net

To contact the editors responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net; Nick Turner at nturner7@bloomberg.net

Bloomberg reserves the right to edit or remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.