So reported research firm IHS Screen Digest Friday, putting Netflix’s share of online movie distribution dollars at 44 percent compared to just 32.3 percent for Apple (see chart).

Also read: Forecast: Online demand for movies, TV shows will top DVD this year

Revenue from movie and TV show sales on Apple’s iTunes store actually increased in 2011, IHS reports. But that growth was dwarfed by the explosion of subscription streaming.

Overall, Apple’s market share of online movie dollars shrunk from 60.8 percent in 2010 to just 32.3 percent in 2011. Netflix grew to its dominant position from owning less than 1 percent of the market at the start of the same period, as the explosion of the subscription video on demand sector more than doubled the size of the overall online movie business to around $992 million. (IHS expects it to once again double this year.)

Driven by Netflix, subscription streaming grew 10,000 percent in 2011, according to the report, from $4.3 million in 2010 to $454 million. Sales of VOD services — the so-called “transactional” business — grew only 75 percent to $273 million.

“We are in the midst of a significant change in the way people pay to consume movies online,” said Dan Cryan, research director for digital media at IHS. “All the significant growth in revenue in the U.S. online movie business in 2011 was generated by rental business models, which provide temporary access, not permanent ownership.”

Serving two different markets

Cryan noted that Apple and Netflix are in some sense complimentary, with up to 80 percent of movie transactions on iTunes relating to newer releases while Netflix is more focused on older titles.

“Effectively the market has split,” Cryan said. “Netflix and Apple are competing for some of the same consumer time and money. However, the core value proposition of the two services is actually very different.”

The end of ownership?

But any way you slice the data, it’s not a good sign for companies like Apple, as well as Hollywood’s major studios, which are trying to establish cloud-based digital distribution systems based around media ownership.

Also read: Watch for falling formats: Walmart shows off its new UltraViolet service

With consumers less interested in owning movies and TV shows, physical media continues to take a huge hit.

A separate report also issued by IHS Screen Digest Friday showed the amount U.S. households spent on DVD and Blu-ray titles last year declined 11 percent to $133.31, with only 61 percent of that total coming from higher-margin purchases. Five years earlier, that per-house expenditure was $206.78.

Overall, revenue in the U.S. from disc sales declined 12 percent to $8.8 billion in 2001. IHS expects it to drop to $5.4 million by 2016, leaving the size of home entertainment’s packaged media market at mid-1990s VHS-era levels.

The report, from its IHS Screen Digest division, notes that in-app purchases accounted for about 39 percent of app revenues in 2011, and it predicts that in 2012 that proportion has gone up to 49 percent. By 2015 it will account for 64 percent of all revenues.

In terms of actual value, IHS says that in-app payments were worth $970 million in 2011, and will be worth $5.6 billion in 2015. (Sound too big to you? Please comment below.)

Update: More on why those revenues will be so big. Ian Fogg, head of mobile for IHS Screen Digest, pointed out to paidContent in an email that the $5.6-billion figure “is driven by the vast numbers of new smartphones that will ship over the next few years. As the number of smart devices is so great, the app market revenues will grow greatly, and hence so will the in-app revenues.” He also noted that many pay-to-download apps also feature in-app purchasing options; that will additionally contribute to the total size of in-app revenues. [original article continues]

This represents a big opportunity for app store operators like Apple (NSDQ: AAPL) and Google (NSDQ: GOOG), as well as mobile payments companies like Boku, Zong and PayPal to manage these payments.

And it also represents something of a success, too, considering how much opposition there was to in-app billing when it was first launched by Apple with requirements to pay it 30 percent of each transaction.

“Apple has nailed the mobile gaming and mobile app payment business,” noted Wilhelm Taht, marketing director for mobile social media service Flowd, earlier today. “It’s super frictionless.”

Strangely, the report does not take account of mobile advertising as a route to making money from an app. That could be because the only apps that can actually make any significant money from advertising are those that get the very highest amount of traffic — other long-tail apps that lack scale will face a challenge in trying to use advertising as their main business model.

Today, free apps already have significantly more traffic than paid apps: Nielsen last week noted that consumers mainly use a mixture of these, or a free-only selection of apps; those who only opt for paid apps account for low, single-figure percentages in different categories (around two-three percent). Ironically, paid apps today remain the main way that many of the most successful apps (such as games) are making money.

Free-to-download apps that come with in-app purchasing — so-called “freemium” apps — represented 45 percent of all top-grossing iPhone apps, and 31 percent of the highest-earning Android apps in the U.S.

IHS Screen Digest estimates that some 68 percent of all top-grossing apps had at least some form of “additional content or functionality” available through in-app purchase, which could mean features like extra levels in games, virtual currency to continue playing or extra editions of a publication.

Virtual currency, it says, is the most common form of in-app paid content available today, accounting for 63 percent of all revenues made from in-app purchases.

But while we hear a lot about newspapers and magazines, and increasingly video-based apps looking to in-app payments as a way of getting their users to buy mobile content, overall, this represents a very small part of revenues today: in the UK in Q3 2011, publications accounted for only five percent of in-app payment revenues (no figures for the U.S.), while video accounted for only two percent of in-app revenues in the U.S. and none in the UK.