Research firm Screen Digest says that Apple should move ahead of Time Warner Cable (NYSE: TMC), and will be second only to Comcast (NASDAQ: CMCSA) by the end of this year.
The FT reports that iTunes will have overtaken the video-on-demand service operated by Comcast, the largest provider, by 2014.The news may be bad for the cable companies, but it is worse for companies like Netflix (NASDAQ: NFLX) and Walmart (NYSE: WMT) which have much smaller shares of the US VOD market. They are using their brands and large customer networks to increase their footholds. The same is true of AT&T (NYSE: T) and Verizon (NYSE: VZ), which have set up fiber-to-the home products FiOS and U-verse. Verizon has spent over $20 billion one the infrastructure for its initiative.
The news also shows that growing power of the Apple hardware/software/content ecosystem that has continued to grow with the launch of the iPad and iPhone 4. Apple has effectively built a network for content using its hundreds of millions of devices . The size of that network makes it impossible for content companies to gain access to many consumers.
Apple is, once again, the winner in a market that a decade ago no one would have believed that it would be in at all
Douglas A. McIntyre
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