According to market-share numbers from IHS Screen Digest, Apple's dominant iTunes Store lost major market share for digital video content in 2010 to rivals, primarily to Microsoft's Zune Marketplace. Apple's service is still in first place by a wide margin, but it's no longer the only viable choice for TV-show and movie rentals and purchases online.
Overall, US revenues from digital video content were up 60 percent in 2010, IHS noted. (These revenues don't include streamed movie services, like those offered by Netflix.) And although iTunes did grow in the year, it didn't grow as fast as its closest rivals, Zune Marketplace and PlayStation Store.
IHS says that iTunes video revenue share fell from 74.4 percent of the market in 2009 to 64.5 percent in 2010. Meanwhile, Microsoft's Zune Marketplace saw a similarly large percentage increase in the same time period, jumping from 11.6 percent to 17.9 percent of the market. Zune Marketplace provides content through the Zune PC software, Xbox 360, and on Windows Phone.
Sony's PlayStation Store, available on the company's PlayStation 3 video game console, also saw gains in 2010. That service jumped from 5.7 percent of the market in 2009 to 7.2 percent in 2010.
Oddly, IHS believes that a fourth player, Wal-Mart, will eventually grow to offer the biggest competition to iTunes. "The future of the online movie business may come down to a competitive battle between Apple and Wal-Mart," IHS research director Arash Amel said. "Although Wal-Mart is not on the charts yet, the company soon will become a major player if its current momentum continues. The company already represents a critical source of revenue for the major Hollywood studios because of its massive sales of Blu-ray and DVD movies, and now is expanding this business into the online realm."
Although Wal-Mart seems like an obvious choice, it's worth remembering that the retailer's similar and earlier entry into the digital music market was unsuccessful. Wal-Mart has teamed with Vudu for its fledgling video service.