Report: Online Movie Sales to Top $1.8B by 2011

2 Sep, 2008 By: Erik Gruenwedel

With the digital divide between the Internet and the living room television narrowing, sales of movie downloads and rental streams are projected to reach $1.8 billion in the United States by the end of 2011, according to a new report.

Total online entertainment revenue is expected to top $4.4 billion, according to the report compiled by Research & Markets (R&M), a Dublin-based data-marketing firm.

Indeed, the study found that despite the proliferation of user-generated video and related content, full-length feature movie downloads continues to “languish.”

R&M said success with the online movie download business model would hedge particularly on the success of Apple’s marketing effort for its ubiquitous iTunes store, iPod and iPhone.

The report said that while Apple would dominate the electronic movie sellthrough market (even greater than its hold on the digital music market), its continued high visibility would ultimately open the door for competing services.

“The majority of full-length movies sold through iTunes without the use of AppleTV will involve a large number of users buying a small number of movies,” the report said. “However, for movie sales through iTunes using AppleTV, the majority of sales will occur among a small number of users buying a greater number of movies.”