Though Apple's iTunes has the best selection of current movies, Netflix currently dominates the digital movie space, according to Tuesday data from NPD Group.
Netflix's digital movie share reached 61 percent in January, NPD said. That includes downloads and streaming, though Netflix does not currently provide movie downloads. Comcast's on-demand offerings are a distant second at 8 percent, while DirecTV, Time Warner Cable, and Apple are tied for third place with 4 percent.
"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," Russ Crupnick, entertainment industry analyst for NPD, said in a statement. "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."
Netflix offers unlimited access to its Watch Instantly library, and recently introduced a streaming-only option in the U.S. for $7.99 per month. With more than 20 million subscribers, that translates into a lot of streaming content; 3.08 million of those people joined in the last quarter alone.
"Streaming is much bigger for us than DVD, in hours of entertainment delivered, and streaming is growing much faster than DVD," Netflix said during a January earnings call.
While some have criticized Netflix for the lack of available content via Watch Instantly, but the company has been hard at work in the last year securing licensing deals with various film studios. Netflix availability has also expanded - from game consoles and smartphones to peripheral devices like Boxee and Apple TV.
An October report said that Netflix accounts for more than 20 percent of all downstream Internet traffic during the peak usage hours of 8 to 10 pm.
"This may or may not be accurate, but it should be noted that because we pay for the data to be delivered to regional ISP front doors, little of this traffic goes over the Internet or ISP backbone networks, thereby minimizing ISP costs, avoiding congestion, and improving performance for end-using consumers," Netflix said in January.
The NPD results were based on data collected for its new VideoWatch Digital tracking service, which surveyed more than 10,000 people.
NPD also examined consumer satisfaction with electronic sell-through (EST), Internet VOD (iVOD), cable VOD, and subscription streaming. Consumers recognized that EST services like iTunes have the most "current releases available," but Netflix streaming got credit from customers for providing the best "overall shopping experience" and "value for price paid," NPD said.