Comscore released a report on the status of the online video industry, and overall video properties owned by Google continue to grow and dominate the market.
There is an important distinction to make though, and that is the domination is in how many videos are watched, rather than unique visitors.
In videos viewed, Google (GOOG) has 31.3 percent of the market, while Fox Interactive Media (NWS-A) is the closest competitor with only 4.4 percent. A quick look makes it seem Google is crushing the competition, but that isn't the case.
When you bring it into the context of unique visitors, the numbers look a little different, with Google still the leader by far, but things are much more close. In this category, Google has 41.8 percent of market share, while Fox Interactive Media accounts for 25.4 percent. Yahoo (YHOO) is next with 20.5 unique visitors.
The discrepancy in numbers tell me that when people visit YouTube, because of the enormous amount of short videos, they're going to probably always lead in the viewing video segment, as their competitors in general offer on average a much longer video.
Top U.S. Online Video Properties* by Unique Video Viewers November 2007 Total U.S. – Home/Work/University Locations Source: comScore Video Metrix | ||
Property | Unique Viewers (000) | Percent of all U.S. Internet Users |
Total Internet | 138,383 | 75.9% |
Google Sites | 76,187 | 41.8% |
Fox Interactive Media | 46,349 | 25.4% |
Yahoo! Sites | 37,300 | 20.5% |
Time Warner Network | 31,212 | 17.1% |
Microsoft Sites | 28,470 | 15.6% |
Viacom Digital | 23,522 | 12.9% |
Disney Online | 10,361 | 5.7% |
ESPN | 10,128 | 5.6% |
ABC.com | 9,969 | 5.5% |
CBS Corporation | 8,336 | 4.6% |
Of course Google still has the task of figuring out ways to monetize video to make a profit. I know they have some initiatives in place, but it's a long way from making money.
Another interesting thing about YouTube is a lot of their traffic is generated from people embedding video into their websites or blogs, and that makes the site itself not really branded. It's considered more of a tool than a destination by many people.
On the other hand, Fox Interactive Media has been working on putting up a lot of destination sites to drive their traffic.
Which is better? There's no answer yet. From a business standpoint, Fox Interactive Media is far ahead of YouTube as far as making money goes, and they're increasing revenue all the time.
Most advertisers shy away from marketing through user-generated content because they want to protect their brands, and that's overall the strength and impetus of YouTube.
All the viewing in the world doesn't matter if there's not a way to place advertising against it. Once Google slows down in overall growth, shareholders will start seriously looking at whether YouTube is really a drag on the company. At that time there'll be tremendous pressure to have them make money from it. At that point they'll have to change the way they do things, probably moving to something similar to what Fox is doing with MySpace.
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