How to increase iTunes profits in wake of competition

A November 2, 2006 report from NPD Group on the paid online movie download market shows Apple iTunes as having
a 67% share of the market, with the next closest competitor (Movieflix) at 19% and CinemaNow with 9%. With such a
advantageous position in the market, Apple should not risk the success of the current conventional download format by
switching to an unproven bittorrent system. Doing so may cause customer dissatisfaction as download rates could very
greatly. Instead of switching to a bittorrent system, Apple should look to increase its consumer base and profits by licensing
more films from different studios. 
But as more competitors enter the movie download market, there is reason for Apple to worry. The newest entrants into
the online movie download market are big competitors such as Amazon, Wal-Mart, and Bit Torrent Inc. Although iTunes
is the preferred and trusted store for television downloads for a majority of online users, the new competition offers a wider
selection of movies. Bit Torrent’s Entertainment Network has licensed films from major studios such as: Twentieth Century
Fox, Warner, Lionsgate, Paramount/MTV and MGM. Amazon and Wal-Mart currently offer downloads from the same studios
as BitTorrent, plus both have Sony/Universal and Wal-Mart has Disney. Apple only offers movies from Disney, Miramax, Pixar,
and Touchstone. 
The online movie download market is fresh and developing. Many well-known companies such as AOL, Amazon, Wal-Mart,
Bit Torrent, and NetFlix are just opening download services or are in the process of development. Apple had an earlier entry
into the market than most back in September 2006, and should make every effort to maintain their clientele. Capitalizing on
the enormous success of their television downloads, Apple already has a broad range of costumers that are familiar and pleased
with their current system of downloads. In order to not lose these costumers to other retailers, Apple should not implement the
unpredictable bittorrent system. Although some downloads of highly popular movies may be faster than the iTunes current system,
older films with less demand will tend to have highly variable rates that may frustrate customers. Instead of switching download
networks, Apple should look to license with more studios and offer a wider selection of films with HD quality.

http://blogs.zdnet.com/ITFacts/?p=11995

http://www.cinematical.com/2007/02/26/bittorrent-joins-legit-movie-download-market/

http://www.techcrunch.com/2006/10/24/aol-video-adds-paramount-product-still-lags-market/