It is rumored that Steve Jobs will announce a video rental service for iTunes in his much-anticipated MacWorld keynote on Tuesday. Adding fuel to the fire of speculation, Netflix has preempted Apple's announcement saying it will offer unlimited access to its streaming video library to most customers. To lend context to the announcements, I wanted to profile Netflix and Blockbuster, the two biggest players in online movie rental.

Below is a ranking of the top 10 Video and Games websites based on share of US Internet visits. As you can see, the top ranked websites are for purchasing videos and games. Netflix and Blockbuster rank 4th and 5th respectively with Netflix attracting 47% more US visits than Blockbuster.

The top sources of traffic to both Netflix and Blockbuster are Yahoo! Mail and Google. Netflix received 23% of its visits from Email Services last week and 13% from Search Engines and Blockbuster received 19% from Email and 17% from Search. Netflix engages in much more paid search marketing with 54% of its search traffic coming from paid listings compared to only 14% for Blockbuster. For both websites, the brand name is by far the most important source of search traffic. All but three of the top 30 search terms sending visits to Netflix in the past four weeks were variations on the NetFlix brand name. All but six of the top 30 search terms to Blockbuster were variations of its brand name.

Blockbuster tends to appeal more to high income ($150K+) young (18-34 year old) Internet users. Netflix on the other hand appeals more to older (55+) lower income groups (earning $60K or less). The profile of visitors to the iTunes website falls between the two, over-indexing among 25-44 year olds earning $60K-$100K.

I will pay close attention to the announcements on Tuesday but personally, I am more interested in the rumors of a lightweight MacBook!

Heather Hopkins

Heather Hopkins is VP of Research for Hitwise UK. This piece was originally posted on Hitwise Analyst blog here.

Flickr Image By dfarber