Video sharing sites are gaining foothold, but do not compete with TV time

01. 05. 2009.

In Hungary, more than 650 thousand people viewed online video content frequently in late 2008, the May 2009 issue of the GKIeNET – T-Home – T-Mobile Report on the Internet Economy reveals. Online video viewing is becoming increasingly popular, and dominant global market players are  emerging. In addition, domestic video sharing sites are also playing a significant role.  Video sharing sites also function as search engines for video content.

In late 2008, the number of frequent internet users aged 14 and over totaled 3.09 million in Hungary (36% of the overall population), of which 21% (650 thousand) were considered frequent online video viewers.  According to a survey published by eMarketer in early 2009, almost 82% of all internet users in the United States were also online video viewers in late 2008 (totaling 137 million consumers, 45% of the overall population). This foreshadows that the video content available on the web contributes to an increase in the intensity of internet use. This phenomenon has already begun in Hungary, as well.

In late 2008, the number of frequent internet users aged 14 and over totaled 3.09 million in Hungary (36% of the overall population), of which 21% (650 thousand) were considered frequent online video viewers.  According to a survey published by eMarketer in early 2009, almost 82% of all internet users in the United States were also online video viewers in late 2008 (totaling 137 million consumers, 45% of the overall population). This foreshadows that the video content available on the web contributes to an increase in the intensity of internet use. This phenomenon has already begun in Hungary, as well.

A small percentage of American online video viewers (10-15%) watch only downloaded video content, while more than half of the users view streamed as well as downloaded video. Although video sharing sites typically offer streaming video (content presented solely for viewing or listening),   it is easy to access special software  and online applications to download videos from video sharing sites. 30-40% of the online video viewers in the US watch streaming video only. Older users outrank younger ones in this respect, with more than half of online video viewers aged 55+ watching only streaming videos without downloading.

Video content was accessible on the internet as early as in the mid 90s (Guba.com, Heavy.com), but the first community based (Web 2.0) video sharing sites were not created until 2003. Of the currently most popular video sharing sites worldwide, Metacafe was launched in 2003, followed two years later by YouTube, and almost simultaneously by Dailymotion and Google Video. Hulu was established in March 2007.

The Long Tail concept has been observed in the realm of video sharing services, as well. For the time being, the most popular site is YouTube, owned by Google, where the most viewed videos are watched a few hundred thousand times a day, while the site has 210 million visits daily (totaling 6.3 billion page views on a monthly average). Currently 15 hours of content is being uploaded every minute.

The increasingly popular video sharing sites are trying to distinguish themselves by various strategies:

•    Dailymotion:

In contrast to YouTube, which has a similar percentage of male and female users, Dailymotion is more popular with male viewers. The maximum file size of uploads is 150 Mbyte, which is higher than YouTube’s 100 Mbyte limitation. Video length is limited to 20 minutes  (compared with 10 minutes at YouTube). The site allows mobile or direct webcam uploads, which suggests that eventually any user could create content for the whole world as an amateur reporter.

•   Imeem.com:

This comprehensive community site, funded in 2004, hosts videos as well as blogs, audio files and pictures.

•    Google Video:

Google’s own video sharing website, started in 2005, has been showing a dynamic growth in the number of unique users, but its market share never came close to that of YouTube.  This was one of the reasons why Google ended up buying YouTube in the fall of 2006. Currently, search results on the Google Video website include YouTube videos as well. With this application, Google created a loose link between the two services it owns, while also satisfying the demand for broad spectrum content. The popularity of Google Video is similar to that of Video.Yahoo.com (the Yahoo! service, launched in 2005, became a comprehensive video sharing site by 2006). These two hosts have approximately 2 million unique users each on a monthly average.

•    Hulu:

This site was founded by NBC Universal and News Corporation in 2007. In April 2009 Disney became a joint venture partner as well. A private equity firm  (Providence Equity Partners) invested 100 million dollars in the development of the video sharing site. Distribution partners include AOL, Comcast, MySpace and Yahoo!. The limited but legal content presented on Hulu (series, movies)  results in high view counts. The website is getting a rapidly increasing number of hits, and users tend to spend significantly more time on the site than YouTube viewers.