Gleacher & Company's Brian Marshall said Dec. 29 that according to his estimates, sourced from company reports and additional research, Apple rents around 475,000 movies and TV shows per day through the iTunes store. Netflix, by comparison, rents over 10 times as much, with about 5.1 million rentals per day.
But Apple and Netflix have very different models. Netflix offers a "pay once, watch as much as you can" model, while Apple embraces a fee-per-download way of doing things. Maybe Apple is more successful from a revenue perspective, despite the large discrepancy in daily rentals? Not so, according to Marshall.
According to his estimates, iTunes rentals bring in around $60 million per quarter, while purchases through the media distribution service account for around $50 million, making for a total of approximately $110 million per quarter. Netflix's reported revenue for just a single month (Sept. 2010) is about $550 million, or five times as much.
It's by no means bad news for Apple, which is still growing its iTunes rental business. Marshall believes iTunes rental revenue could exceed $1 billion per year within five years, giving it another fairly healthy revenue stream, even after giving movie studios their cut.
The bottom line remains that Netflix has far more traction than iTunes as a means for renting and viewing streamed content, so it's hard to underestimate its effect on Apple TV sales. Anecdotally, it's the only thing anyone I know who has one uses it for, and almost none of those I know who bought this model owned a previous generation device.
So is Apple TV just a great Netflix box, or is something else driving sales? The impending potential of apps, maybe?
Related content from GigaOM Pro (sub req'd):
- Connected Consumer 2011: Rise of the Virtual Video Operator
- Report: A Mobile Video Market Overview
- Mobile 2011: Data Consumption Will Explode
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