may have started off as a DVD rental-by-mail business, but the company has since evolved into a dominant streaming service. And when we say dominant, we mean that six out of every 10 digital movies streamed originate from Netflix, according to figures by NPD Group's VideoWatch Digital tracking service.
"Sales of DVDs and Blu-ray discs still drive most home-video revenue, but VOD and other digital options are now beginning to make inroads with consumers," said Russ Crupnick, entertainment industry analyst for NPD. "Overwhelmingly digital movie buyers do not believe physical discs are out of fashion, but their digital transactions were motivated by the immediate access and ease of acquisition provided by streaming and downloading digital video files."
No one should be surprised that Netflix holds a 61 percent stake of the streaming movie market, unless you thought that number should be higher. In late 2010, Netflix co-founder and CEO Reed Hastings said, "We are now primarily a streaming video company delivering a wide selection of TV shows and films over the Internet." He made the statement when unveiling Netflix's $7.99/month streaming-only subscription plan.
To put Netflix's market share into perspective, consider that its closest challenger in the streaming movie space is Comcast, which holds a comparatively paltry 8 percent share. There's a three-way tie for third at 4 percent with DirecTV, Time Warner Cable, and Apple.