Apple’s iTunes captured 65.8% share of the market for electronic sell-through (EST) and Internet Video-on-Demand (iVoD) movies in the first half of 2011, up from 64.9% for the year-ago period and reversing an 11.9-point year-over-year decline for 2010’s first half, according to IHS Screen Digest Media Research.

The U.S. iVoD and EST market yielded $229 million in revenue in H1 2011. EST accounted for $118 million of the total. IHS forecasts that full-year 2011 market revenue will grow to $487 million, with EST accounting for $247 million and iVoD $240 million.

iTunes’ increase was the largest growth increase among online movie distributors IHS surveyed, as well as the first for iTunes’ OTT movie segment since 2009.

The Microsoft Zune Video Marketplace ranked second in the IHS survey with a 16.2% market share, down from 18.5% in 2010’s first half. Wal-Mart’s Vudu ranked third with a 5.3% market share, up from 1% in the year-ago period. The Sony PlayStation Store and Amazon followed, with 4.4% and 4.2% shares of market, down from 8.2% and up from 4% from 2010’s first half respectively.

“iTunes’ expansion of its market lead represents a remarkable achievement in light of intensifying competition from a slew of aggressive rivals,” said Arash Amel, research director for digital media at IHS. “Much of iTunes’ success can be traced to the rising usage of Apple’s AirPlay system, which allows wireless video streaming to consumer electronic devices including televisions. This has expanded the reach of iTunes to new platforms, boosting sales of movies from the system.”

A growing installed base of iPad’s and price promotions added to iTunes’ share increase, he added.

Wal-Mart’s Vudu was the other big success story among the major digitally distributed online movie stores in 2011’s first half, according to IHS. “Just as IHS predicted in its February release, Vudu has emerged as a major market rival to established players like Apple and Sony,” Amel commented. “Vudu’s gains were driven by several factors, including its shrewd device strategy, a good customer experience, a compelling user interface and its $1/$2 rental pricing system.”

Sony and Microsoft, in contrast, face challenges, while Amazon was in the midst of a transition to streaming video on demand (SVOD) and Amazon Prime, according to IHS’ analysis.

“The new-release on-demand business is all about iVoD,” according to Amel. “In the current economic climate, consumers are more interested in accessing movies than in owning them. Because of this, growth in EST has virtually stopped. Whatever small EST growth that is happening is coming from aggressive sales on iTunes, as well as discounting across major services.”

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