How Social Video Could Kill YouTube

Startups like SocialCam and Viddy, two of the fastest growing social networks for sharing video on smartphones, may be on a collision course with Google-owned YouTube. While initial indicators are far from conclusive, rumblings of a possible market tsunami are afoot.

From January to March, people spent 10% less time watching YouTube videos online, while users of mobile video apps increased their viewing time by 52%, according to San Francisco-based Flurry, a mobile advertising and analytics platform provider. In March, each active user averaged 425 minutes on YouTube and 231 minutes on mobile video apps.

While the numbers are interesting, Peter Farago, vice president of marketing at Flurry, acknowledges they do not prove that mobile apps are taking viewer time from YouTube. That kind of proof would have to come from a statistical study.

Nevertheless, Farago believes the numbers are a canary in the coal mine. With increasing processing power, higher bandwidth and high-definition cameras, smartphones are becoming a good platform for capturing memorable moments and then sharing them with friends and family. So, it is certainly possible that people are spending less time watching online video, and more time creating and sharing it. “When you put all that together with a Viddy or SocialCam, which are very cool, fun, editing, sharing tools, you start to get the perfect storm, or the planets align,” he said.

So what’s so special about apps like Viddy or SocialCam? Simplicity. YouTube has a mobile app, but it can be a multistep process to post video. While the steps may not seem difficult, they’re enough of a hassle to prevent people from bothering. That weakness is what mobile video apps are attacking. SocialCam, for example, does not require a separate step for uploading. The app automatically moves the video to SocialCam servers, which then shares it based on the user’s preferences.

This kind of simplicity is only possible from startups that begin and end with the smartphone or tablet. The online world of websites and PCs is so last generation to them. The generational shift from the PC to mobile devices in accessing the Web is the kind of rapid change that can mark the downfall of companies as powerful as Google and Facebook in as little as five years, Eric Jackson, founder and managing member of Ironfire Capital, recently argued in Forbes.

In roughly 20 years, the world has seen three Internet generations starting with the Web portals (Yahoo, AOL, Amazon, eBay and Google), then the social media companies (Facebook, LinkedIn, Groupon), and now mobile. Each new generation brings changes that the older generation can’t quite adapt to fast enough, Jackson argues. Yes, the seniors can try to buy their way in, such as Facebook paying $1 billion for Instagram, but they are still left with trying to bolt the new platform onto the older platform, which is still driving profits.

While older companies struggle to reinvent their legacies, Viddy, SocialCam and other startups remain focused on the technology people are quickly moving to today – in this case, mobile devices. This razor-sharp focus has led to Viddy and SocialCam amassing more than 60 million users. Meanwhile, the previous generation is reaching for the oxygen mask to try to keep up.

Of course, with Google’s billions of dollars behind it, YouTube, which has a mobile app, has the resources to adapt. However, having money and even millions of users may not be enough to keep up with the speed of change. Just ask Yahoo and AOL.

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