Smartphone App Developers in the US January 2014   1WWW.IBISWORLD.COM Download complete: The functionality of appswill continue to dramatically increase revenueIBISWorld Industry Report OD5817Smartphone AppDevelopers in the USJanuary 2014Sarah Kahn2About this Industry17 International Trade30 Key Statistics2Industry Definition18 Business Locations30 Industry Data2Main Activities2Similar Industries20 Competitive Landscape3Additional Resources20 Market Share Concentration4Industry at a Glance5Industry Performance22 Barriers to Entry5Executive Summary23 Industry Globalization5Key External Drivers7Current Performance9Industry Outlook30 Annual Change20 Key Success Factors30 Key Ratios31 Jargon & Glossary20 Cost Structure Benchmarks22 Basis of Competition11 Industry Life Cycle24 Major Companies25 Operating Conditions25 Capital Intensity13 Products & Markets26 Technology & Systems13 Supply Chain27 Revenue Volatility13 Products & Services28 Regulation & Policy15 Demand Determinants29 Industry Assistance15 Major 1-800-330-3772 info

Smartphone App Developers in the US January 2014   2WWW.IBISWORLD.COM About this IndustryIndustry DefinitionThis industry develops and publishesapplications for smartphones andmobile devices. Apps are typically soldin a special “app store” that can beaccessed through the device.Main ActivitiesThe primary activities of this industry areCreation of smartphone appsScript and code writing for external clientsDesign and user interface consultation for external clientsThe major products and services in this industry areEntertainment appsGamesLifestyle appsSocial appsTools and productivity appsOther appsSimilar Industries51121 Software Publishing in the USSoftware publishers disseminate licenses to customers for the right to execute software on their owncomputers.51121e Video Game Software Publishing in the USThese establishments carry out operations necessary for producing and distributing video games, includingdesign, documentation, installation and support services.51121f Security Software Publishing in the USThis industry develops and distributes antivirus, anti-keylogger, spyware removal, encryption and firewallsoftware.NN003 Video Games in the USThe Video Games industry includes the broader operations of all video games components in the UnitedStates.

Smartphone App Developers in the US January 2014   3WWW.IBISWORLD.COM About this IndustryAdditional ResourcesFor additional information on this e.orgThe Application Developers Vergewww.census.govUnited States Census Bureau IBISWorldwrites over 700 USindustry reports, which are updatedup to four times a year. To see allreports, go to

WWW.IBISWORLD.COM Smartphone App Developers in the US January 20144Industry at a GlanceSmartphone App Developers in 2014Key StatisticsSnapshotRevenueAnnual Growth 09-14Annual Growth 14-19ProfitWagesBusinesses 9.7bn49.8%28.9%195,000 302.2m 6.5bnNumber of mobile internet connectionsRevenue vs. employment growthMarket ShareThere are noMajor Players inthis industry600400300360Millions% change4802401202001000 120Year 06081012Revenue1416180Year 052007091113151719EmploymentSOURCE: WWW.IBISWORLD.COMp. 24Products and services segmentation (2014)Key External Drivers4.8%Number of mobileinternet connections2.9%Lifestyle appsSocial apps11.1%Percentage of servicesconducted onlineTools and productivity appsDemand frome-commerce andonline auctions13.2%Time spent onleisure and sports53.9%Other appsGames14.1%Entertainment appsp. ndustry StructureLife Cycle StageRevenue VolatilityGrowthVery HighRegulation LevelMediumTechnology ChangeHighCapital IntensityLowBarriers to EntryLowIndustry AssistanceLowIndustry GlobalizationLowConcentration LevelLowCompetition LevelHighFOR ADDITIONAL STATISTICS AND TIME SERIES SEE THE APPENDIX ON PAGE 30

Smartphone App Developers in the US January 2014   5WWW.IBISWORLD.COM Industry PerformanceExecutive Summary Key External Drivers Current PerformanceIndustry Outlook Life Cycle StageExecutiveSummaryThe release of the Apple iPhone and thelaunch of Google’s Android have jumpstarted a practically inexistent industryof smartphone app developers. Thesmartphone’s instant popularity andhigh adoption rate stimulateddevelopers to quickly introduce fans ofthis new device to its full capabilitiesand superior functionality, offeringgaming, entertainment, productivity,lifestyle and social apps. The percentageof services conducted online, often onsmartphones, has been increasingconstantly, along with demand frome-commerce and online auctions. Overthe five years to 2014, revenue isexpected to increase at an estimated rateof 49.8% to 9.7 billion.With an increasing number of mobileinternet connections and low barriers toentry, the number of developers has beengrowing rapidly, and the structure of theindustry is not mature enough toaccommodate them. The industry quicklybecame oversaturated, with playerscompeting to develop new apps andadvertise them to an exigent mobileaudience. Developers have also beenstruggling to make a profit, as anincreasing number of apps are offered forfree. Monetization has been migratingaway from paid apps and advertisementsto a freemium business model that offersa pricing strategy in which a mobile appis available for free, and advancedfeatures and functionality are acquired asin-app purchases. This model is widelysuccessful, and revenue is expected toenjoy a 27.8% boost in 2014 alone.Over the next five years, developerswill likely struggle to satisfy the digitalconsumer. Developers are expected toincreasingly rely on the development ofweb apps that are run by a browser,typically written in HTML5 andfunction across multiple platforms;consequently, they will rely less on thedevelopment of native apps that areintegrated with the device’s respectiveoperating system. Big data andpredictive analytics are also expected toallow developers to create predictiveapps. With the increase in privateinformation stored on smartphones,developers will likely struggle withmobile app security. As developersattempt to differentiate apps in theoversaturated industry, opportunitiesfor mobile app marketing are also onthe horizon. Due to the decreasingaverage app price, Industry revenue isprojected to climb at a slowerannualized rate of 28.9% to 34.7billion over the five years to 2019.Number of mobile internet connectionsThe number of mobile internetconnections represents the total numberof consumers who own a broadbandinternet-capable device, such as asmartphone. As the number ofsmartphone purchases increases with thenumber of mobile internet connections in2014, app developers will see a greatermarket for their products.Percentage of services conducted onlineThe percentage of services conductedonline represents consumers’ andbusinesses’ increasing use of the internetfor services they used to pay for atphysical locations (e.g. streaming moviesonline rather than renting DVDs). As thepercentage of services conducted onlineincreases, so does the percentage ofservices offered through smartphone Developershave been struggling to make aprofit, as many apps are offered for freeKey External Drivers

Smartphone App Developers in the US January 2014   6WWW.IBISWORLD.COM Industry Performanceapplications. These services are expectedto increase in 2014, providing anopportunity for this apps to assist time-strappedconsumers who would rather shop fromtheir living rooms.Demand from e-commerceand online auctionsE-commerce and online auctions sellgoods online, primarily over the internetvia either a retailer’s online store or anauction site. With online shoppingbecoming more popular, retailers haveexpanded their product lines as well as theplatforms on which they operate. Asdemand from e-commerce increases in2014, retailers are expected to create moreTime spent on leisure and sportsGames make up a significant segment ofsmartphone applications and requiresome leisure time to play. While theindustry now serves a broad audience,leisure time is a major restrictive factor inconsumers’ ability to use and purchasesmartphone app products. Time spent onleisure and sports is expected to decreaseslowly in 2014, resulting in a potentialthreat for the industry.Percentage of services conducted onlineNumber of mobile internet connections40015300122009%MillionsKey External Driverscontinued1000Year 056070911131517193Year 0507091113151719SOURCE: WWW.IBISWORLD.COM

Smartphone App Developers in the US January 2014   7WWW.IBISWORLD.COM Industry PerformanceCurrentPerformanceThe past five years have been generous tosmartphone app developers, with industryrevenue growing at an alarmingly strongThe smartphone eraApple’s introduction of the iPhone in2007 gave the Smartphone AppDevelopers industry a boost of mysticalproportions. Apple’s App Store waslaunched in 2008 and was an instantsuccess, causing revenue to shoot up292.1% that year. Inspired by Apple’sachievement, Google quickly jumped onboard and released the Android in 2008,causing a second epic revenue upsurge of468.0% in 2009. BlackBerry, Symbianand Windows followed the market trendas well. By 2010, the smartphoneadoption rate was so high that totalshipment outpaced those of personalcomputers. The ability of smartphones torun mobile apps offers consumers fargreater functionality than other mobilephones. A quickly increasing number ofdevelopers have been attempting tointroduce a growing number ofconsumers to the full capabilities of theirnew devices. The number of appsdownloaded per device has grownsignificantly over the past five years. As aresult, employment increased at analarming 71.6% since 2009, reaching anestimated 417,630 individuals in 2014.Although the majority of app developersare full-time employees, a significantproportion works in app developmentonly part time, while holding another job.Although the app market grew at analarming rate over the past five years,developers account for only about 70% ofrevenue, as platforms such as GooglePlay and App Store charge a 30%transaction fee. Additionally, the highnumber of mobile applications hasincreased market competition, anddevelopers have yet to find an efficientway to market their apps to consumerswho are increasingly accustomed tosifting through a vast number of offeringsand comparing prices and value-added.Mobile app revenue stems frompaid-for apps, advertising and in-apppurchases. Some developers sell theirapps in an online marketplace for apredetermined price and pay a royalty feeto Apple or Google (the dominantplatform owners) for each app sold,applying the traditional pay-per-download model. Others choose torelease their app for free and generaterevenue by placing advertisementsthroughout the user interface. Somedevelopers choose a hybrid version of thetwo, offering a paid-for app with noadvertisements and full functionality, aswell as a free version with sponsored adsand limited functionality. The freemiumbusiness model offers a pricing strategyin which a mobile app is available forfree, and advanced features andfunctionality can be acquired as anin-app purchase. Free downloads within-app purchases are increasinglydominating the app market, increasingfrom 8.6% in 2011 to about 22.5% in2014. Paid-for apps are expected todecrease from an overwhelming 85.5% in2011 to about 69.5% in 2014, according toGartner. The rise of free apps is expectedShow me the money49.8%, to reach an estimated 9.7 billionin 2014, focusing on tools and productivityapps as well as gaming and social apps. Thehigh number of mobileapplications has increasedmarket competition

Smartphone App Developers in the US January 2014   8WWW.IBISWORLD.COM Industry PerformanceShow me the moneycontinuedto put pressure on industry profit andincrease the already high competition.Nevertheless, revenue is expected tocontinue increasing, albeit at a slowerIntense competitionAt the beginning of the smartphoneera, mobile gaming and socialnetworking dominated the industry ofapp development. Although overalltime spent on leisure activities hasdecreased over the past five years,consumers are spending an increasingamount of money on interactiveentertainment online and on digitaldevices. Since then, business apps withpractical utility and online shoppingapps have taken up an increasingmarket share. Mobile apps can serve asvirtual secretaries that assist in timemanagement or mobile wallets thatallow for virtual forms of credit cards.Many of these mobile apps are notdesigned to generate revenue and areused to build brand recognition. Asmany individuals and corporationscompete for a piece of the pie,establishments are expected to increaserate of 27.8% in 2014, as developers findcreative ways to increase their revenueand estimate their customers’ willingnessto pay for extra features. Theoversaturation andlack of structure in theindustry have caused highfailure rates among appsat 49.0% over the five-year period,reaching about 257,072 in 2014.The oversaturation and lack of structurein the Smartphone App Developersindustry have caused developers to faceintense competition, leading to a steepincrease in failure rates among mobileapps. It has also become increasinglydifficult for app developers to differentiatetheir products and market them as superiorto others. Functionality and aesthetics areincreasingly important bases ofcompetition, and apps are expected to beupdated and enhanced regularly.

Smartphone App Developers in the US January 2014   9WWW.IBISWORLD.COM Industry PerformanceAlthough the growth of mobile appsshows no signs of slowing down,revenue derived from these apps isexpected to increase at a slower rate. Inthe five years to 2019, revenue isexpected to experience a 28.9%increase, reaching a total of 34.7billion, as smartphone sales overtakethe sales of other phones.Industry revenue500400% changeIndustryOutlook3002001000 100Year 0608101214161820SOURCE: WWW.IBISWORLD.COMResponding tocompetitionIntense competition and lack of structurein the industry have caused high failurerates among mobile apps. Developers areexpected to search for new and creativeways to create and market their productsat low costs in order to boost their ownmarket share and revenue. Some appdevelopers are using third-party appdevelopers to assist in conceptdevelopment, design or coding in orderto boost their revenue.Over the coming five years,developers are expected to rely moreheavily on the development of web appsand less on the development of nativeapps. Native apps are integrated withsmartphone operating systems,allowing them to interact withhardware in a process similar to that ofcomputer systems. They are accessedthrough icons on the device’s homescreen and take advantage of theirhost’s features and capabilities, such asthe camera, the GPS, compass and listof contacts. These apps may alsoincorporate app-defined gestures.Mobile web apps are run by a browserand are typically written in HTML5.The technology enables developers tocreate apps that are able to functionacross multiple platforms, and theindependence allows companies tocircumvent royalty fees.Today, native apps have a smootherlook and often work faster withoutneeding to constantly download data,while web-based apps remain fragmentedand immature. Extended battery life andincreasing mobile connections, however,are expected to give web apps thecompetitive advantage they need to strikeat the aesthetic advantage of native apps.The migration to web-based apps isexpected to further lower the barriers toentry, causing establishments to increasea further 26.7% to 838,764 in 2019. Asentry into the industry becomes easier,more independent, full-time developersare expected to appear and aim for apiece of the growing pie. Employment isthus expected to increase at a faster ratethan establishments, at 39.0% over thenext five years, to total 2,170,255 workersin 2019.

Smartphone App Developers in the US January 2014   10WWW.IBISWORLD.COM Industry PerformanceThe land of thefreemiumOver the next five years, consumers areexpected to continue migrating awayfrom pay-to-download apps, forcingdevelopers to embrace the freemiumbusiness model that relies onmonetizing free downloads after thefact via in-app purchases. As anincreasing number of mobileapplications are offered for free, theaverage app price is expected to fall,pressuring profit margins. By 2019, freeTargeting andsatisfying the digitalconsumerDevelopers are also expected toincreasingly focus on maintenance,analytics, distribution and services. Appdevelopers are expected to leverage therise of big data and predictive analytics toimprove the app experience. In order todo so, developers will continuouslycollect information and learn about theircustomers and potential buyers to offerapps that detect their intent and ensurethe functionality and content reflect it.The increased use of the GPS will onlyassist in the creation of predictive apps,helping developers provide the rightcontent at the right time.Corporations are expected to continuereaching out to customers with apps that arenot designed to increase revenue, but rathermade to increase name recognition andpublicity. Some organizations are beginningto support personally owned mobile devices,seeking to increase employee satisfactionand productivity while reducing their ownexpenses. This Bring Your Own Devicetrend is expected to create a newopportunity for developers as well as newapp stores. Employers are expected todemand more apps to increase productivityand communication among their mobileemployees, as well as apps that connectsmartphones to enterprise resources.As app developers increasingly useconsumer data and location, recallcustomer credit cards and targetemployers aiming to share companydownloads are expected to account forabout 95.5% of total mobile app storedownloads. According to Gartner, aninformation technology research andadvisory firm, in-app purchases areexpected to increase and account forabout 48.2% of total mobile app storerevenue by 2017 (latest forecast), upfrom the 22.5% expected share in 2014.Revenue from advertising is alsoexpected to increase significantly. Appdevelopers willleverage the rise ofpredictive analytics toimprove the app experienceresources and personal devices, mobileapp security is expected to become agreater issue. Corporations andcustomers must be reassured that theirdata is safe, and security softwaredevelopers have yet to catch up withconsumers and address these fears.Mobile devices and apps may lackpasswords to authenticate users,require only a static password and not atwo-factor authentication and sendinformation that is not encrypted.Additionally, mobile devices maycontain malware and often do not usesecurity software.With an overwhelming number ofnew mobile apps entering the marketeach year, developers will need to findnew ways of marketing their new appsand reaching out to consumers in asaturated market. Creating an effectivemarketing pitch that differentiates theproduct from other similar ones andreaching the greatest possible audienceis expected to be one of the challengesthat developers must overcome in thenext five years.

Smartphone App Developers in the US January 2014   11WWW.IBISWORLD.COM Industry PerformanceTechnological innovationLife Cycle StageGrowing number of developersUndefined product segments% Growth in share of economySmartphone App Developers*20MaturityQuality GrowthCompanyconsolidation;level of economicimportance stableHigh growth in economicimportance; weaker companiesclose down; developedtechnology and markets15Key Features of a Growth IndustryRevenue grows faster than the economyMany new companies enter the marketRapid technology & process changeGrowing customer acceptance of productRapid introduction of products & brands10Quantity GrowthInternet Publishing and BroadcastingMany new companies;minor growth in economicimportance; substantialtechnology change5Software PublishingSecurity Software Publishing0Computer & Packaged Software WholesalingDecline-5Shrinking economicimportance-10-10-50*True value exceeds chart boundaries5101520% Growth in number of establishmentsSOURCE: WWW.IBISWORLD.COM

Smartphone App Developers in the US January 2014   12WWW.IBISWORLD.COM Industry PerformanceIndustry Life Cycle Thisindustryis G rowing The Smartphone App Developersindustry is in the growth stage of its lifecycle. In the 10 years to 2019, industryvalue added, a measure of thecontribution of the industry to theoverall economy, is expected to grow atan annualized 40.4%. Over the sameperiod, total GDP is expected to grow ata much slower 2.7%. Great technologicalinnovation and high adoption rates byconsumers as well as an increasingnumber of industry players areattributing to industry growth. Productinnovation and flexible productsegments also display an industry in itsgrowth stage.Developers have been expanding theirreach to new demographics and cater tomen, women, seniors and children. Asgamers age, they are expected to continuein their leisurely activities, and repeatsales in the industry are expected to keepincreasing revenue. The average age ofgamers is expected to continue climbingover the 10 years to 2019. The future ofindustry profit, however, seemsuncertain, as developers target anaudience increasingly accustomed tousing free apps. Developers are also inthe midst of testing web apps that maycircumvent store royalties and potentiallyincrease profit.

Smartphone App Developers in the US January 2014   13WWW.IBISWORLD.COM Products & MarketsSupply Chain Products & Services Demand DeterminantsMajor Markets International Trade Business LocationsSupply ChainKEY BUYING INDUSTRIES99Consumers in the USApps are primarily marketed to consumers to make everyday tasks easier.KEY SELLING INDUSTRIESProducts & Services42343Computer & Packaged Software Wholesaling in the USApp developers require computers and software to code and test new smartphone apps.51913bInternet Publishing and Broadcasting in the USApp developers require the internet for research, development and testing of apps.53112Commercial Leasing in the USDevelopers often lease commercial spaces for the duration of the app development.54151IT Consulting in the USIndustry operators may use consultants to get a better idea of target audiences and how toproceed with development.54191Market Research in the USApp developers require information on their target market and what services will be requested.The majority of products developed inthe Smartphone App Developers industryare games, which includes revenuegenerated from advertisements, thepurchase of an app and in-app purchases.Additionally, entertainment and toolsand productivity apps generate morethan one-quarter of industry revenue.Over the past five years, these apps havetrended towards generating revenue fromin-app purchases rather than through thepurchase of the actual app. Consumersare more likely to download apps andthen make in-app purchases when theyare drawn in, rather than relying onconsumers making an upfront payment.GamesGames account for the majority of appdevelopments, with an estimated 53.9% ofindustry revenue in 2014. Over the pastfive years, smartphone games havebecome increasingly popular, as theyprovide a convenient, casual and low-costalternative to video game systems.Furthermore, rising smartphonepenetration across the United States hasallowed developers to market games todifferent demographics. This includesolder generations and women, whotypically represent a smaller proportion ofthe market for video games. According toresearch from Flurry, a mobile analyticsfirm, games such as solitaire, slots andsocial turn-based games are most popularwith women above the age of 35.Meanwhile, strategy, shooter, racing andaction role-playing games are mostpopular with men below the age of 35.Over the five years through 2014,games have remained a steady share ofrevenue; however, the way consumersspend money on games has changed.Developers have created morefreemium apps, in which consumersare provided basic functions for freebut must pay to access advancedfeatures or virtual goods. This allowsdevelopers to entice consumers beforerequesting they pay for additionalfeatures. Freemium games are expectedto continue to grow over the next fiveyears, as developers focus onencouraging consumers to downloadgames and get a sample beforerequesting payments.

Smartphone App Developers in the US January 2014   14WWW.IBISWORLD.COM Products & MarketsProducts & ServicescontinuedProducts and services segmentation (2014)4.8%11.1%Lifestyle apps2.9%Social appsTools and productivity apps13.2%Other apps53.9%Games14.1%Entertainment appsTotal 9.7bnEntertainmentEntertainment apps include televisionand film apps such as Netflix, YouTubeand ringtones and wallpaper downloads.Additionally, this segment also includesmusic and video apps such as Pandora,Spotify, Snapchat and other videocreation applications. In 2014,entertainment apps are expected toaccount for about 14.1% of total revenue.Entertainment apps have become morepopular over the past five years, asAmericans increasingly access theinternet through mobile devices.Therefore, more television, film and othermedia is now consumed on the go. As aresult, entertainment apps are expectedto grow as a proportion of revenue overthe next five years.Tools and productivity appsTools and productivity apps are generallyorganizational and administrative. Thisincludes email, cloud storage,calendars, translators and notationtools. In 2014, tools and productivityapps are estimated to account for about11.1% of total industry revenue. Overthe past five years, tools andproductivity apps have remained asteady share of revenue. Many toolsSOURCE: WWW.IBISWORLD.COMand productivity apps are provided aspart of the smartphone operatingsystem and, therefore, there is lessincentive for consumers to make apurchase. However, the rapid uptake ofcloud storage will provideopportunities for app developers overthe next five years.Lifestyle and social appsLifestyle apps are forecast to account for4.8% of industry revenue in 2014. Appsin this segment include online shoppingapps such as Amazon and eBay, retailcoupons from companies such asGroupon, real estate browsers and datingservices. Additionally, social apps areexpected to account for 2.9% of industryrevenue in 2014. This includes apps forpopular social networks such asFacebook, Twitter, Pinterest andspecialized messaging apps.Over the past five years, lifestyle andsocial apps have remained steady as aportion of revenue. Over the five years to2014, consumers have spent more timeusing mobile apps to shop and haveincreasingly browsed social mediathrough smartphone applications. As aresult, the amount of time spent on theseapps by individuals is high; however,

Smartphone App Developers in the US January 2014   15WWW.IBISWORLD.COM Products & MarketsProducts & Servicescontinuedthese apps are typically created by thecompany and updated periodically toensure usability to maximize advertisingrevenue. Therefore, there is little roomfor other app developers to create appsthat can directly compete with majorsocial networks, and instead, developerslook to create apps that are compatiblewith them.OtherOther apps are estimated to account for13.2% of industry revenue in 2014 andinclude news and weather, health andfitness, travel and navigation, personalfinance, business and sports apps. Thissegment has declined as a proportion ofrevenue over the past five years, as othersegments have grown at a more rapid pace.DemandDeterminantsDemand for smartphone apps is drivenby price, smartphone penetration and theproportion of services that individualsare comfortable conducting onlinethrough a smartphone device. Assmartphone technology improves,demand for smartphone apps will grow,and the number of services conductedonline will improve.rising rapidly. Cell phones havebecome a part of everyday life, andsince the introduction of the AppleiPhone in 2007, smartphones haveexploded into the mainstream. Overthe five years through 2014, thenumber of mobile internet connectionshas grown at an average annual rate of36.8% to 234.2 million. As smartphonepenetration increases, the market forapps will expand because moreconsumers will require games, toolsand other applications.PriceThe price of smartphone applications is akey determinant in demand. An increase inconsumer incomes precipitates greaterdiscretionary spending on products such assmartphone apps. Lower app prices willalso result in more purchases fromconsumers. Over the past five years, the wayapp developers have approached generatingrevenue from apps has changed. Morefreemium apps are being marketed, wherethe app itself is free with basic features;however, consumers must spend money toaccess additional content and features.Major MarketsSmartphone penetrationOver the past decade, the number ofmobile internet connections has beenServices conducted onlineConsumer preferences regardinghandling everyday tasks alsoinfluences demand for this industry.Industry revenue will increase asconsumers become more comfortableperforming tasks online, such asshopping, paying bills and accessingmedia. Over the past five years, thepercentage of services conductedonline has risen because of improvingattitudes towards conducting tasksonline and the increasing prevalenceof smartphones.Industry revenue is primarily generatedfrom consumers between the ages of 18and 29. Consumers in this age group tendto be the most technologically savvy, andsmartphone penetration is also highest.Conversely, the smallest proportion ofrevenue is generated form consumers overthe age of 50. Consumers aged under 18are not included because although theymay be a major user of apps, they aretypically not paying for dow

51121e Video Game Software Publishing in the US . The Video Games industry includes the broader operations of all video games components in the United States. Industry Definition . online rather than renting DVDs). As the percentage of services conducted