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Netflix Passed Apple in Internet-Movie Revenue in 2011

June 1 (Bloomberg) -- Netflix Inc. passed Apple 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

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