Video Sharing Shakeout: Help Us Pick Winners/Losers!

As discussed in previous installments of our Economics of Online Video series, we expect a major shakeout in this overcrowded space in which most companies will disappear.  Whether the companies disappear in a good way (sell out early for a nice price) or a bad way (go bankrupt and/or sell for pennies on the dollar) will be a function of both time and competitive differentiation.

Specifically, to survive the shakeout, we believe video-sharing companies will need either:

  1. Industry-leading scale (at most three companies will clear this hurdle)
  2. Well-defined, defensible niche audience or services.

Companies that lack either of these attributes, in our opinion, should immediately sell out or focus on a defensible niche.  Right now, the video market is growing fast enough that the tide is lifting most boats.  The economics of the business are already brutal, however, and sooner or later investors will get gun-shy.  (At which point, everyone will race for the doors). 


The next step is separating winners from losers.  Specifically, we need to figure out which of the 20-odd video sharing companies have a chance of surviving.  We have developed a preliminary analysis (here), but our data is incomplete, so we need your help.  (Our preliminary WINNERS include YouTube (GOOG), Yahoo (YHOO), and  The LOSERS include Crackle, Video Egg, Revver, Clipshack, Motionbox, and Hulu.  The rest should start thinking about selling or focusing).

Do you work at a video-sharing company? (one we have listed here or one we’ve forgotten)?  Please let us know whether the traffic, year-over-year growth, and strategic differentiation data we have noted on this sheet is reasonably accurate–and if not, please send us more accurate data.  On the “strategy” point, if our preliminary determination is that you have no strategic differentiation–and you disagree–please explain in detail why we are wrong (reminder: cool features aren’t a strategy). 

We want to stress that this a business analysis, not a feature analysis (like the nice one TechCrunch just did).  We have no opinion on where users should watch or upload videos (except that we might suggest choosing a potential survivor).  All we are trying to determine is which video sharing businesses are going concerns and which aren’t. We will compile all your input and release our formal VIDEO WINNERS AND LOSERS conclusions later this month.  Thank you in advance for your help. 

(If you want your input to be public, please enter it in the comments.  If you’d like us to keep it on background, please send it to [email protected]).

In the meantime, here’s our preliminary list of VIDEO-SHARING WINNERS AND LOSERS.  We’ve divided the companies into three basic categories: WINNER, SALE, and FIRESALE.  If the SALE companies wait too long to sell, they will migrate to FIRESALE.

Preliminary analysis of video-sharing sites. Traffic from Comscore and Compete.  Please send updated traffic info and/or competitive differentiation arguments to [email protected].  For better formatting, please click here:                   

Site                Traffic (000s)    Y/Y Growth    Differentiated?    Prelim. Prognosis    Logic
YouTube            206,000                96%               Yes (Scale)            Winner                    Scale
Yahoo Video*    48,000                    NA                No                        Winner                Scale
Google Video    38,000                    NA                No                        Winner                Scale
Metacafe            27,000                    NA                No                        Sale        Not enough scale
DailyMotion        26,800                    NA                No                        Sale        Not enough scale
Veoh                  11,500                848%                No                        Sale    Not enough scale
Heavy                7,700                    27%            Yes (Audience)            Sale    Some scale, focus
Megavideo          4,550                    NR                No                        Sale    Not enough scale            3,100                144%            Yes (Audience)        Sale    Some scale, focus
Crackle                2,200                16%                No                        Firesale    No scale
Spike (ifilm)        1,500                -35%                Sale   
Joost                    1,000                NR                Yes (software)        Sale           Wrong format                   885                    NR            Yes (niche)            Winner     Niche focus
Revver                    745                345%                No                    Firesale    No scale
Video Egg            740                    400%                No                    Firesale    No scale
Vimeo                    570                250%                Yes (community)    Sale    Little scale
Motionbox                308                NR                    No                    Firesale    No scale
TAKKLE                    238                NR                Yes (Niche)            Sale        Focus, but little scale.
ClipShack                18                    NR                No                        Firesale    No scale.
Hulu                        0                    NR                    No                    Firesale    No real differentiation

See Also:

Economics of Online Video: One Tough Business
Economics of Online Video 2: Unit Economics
Economics of Online Video 3: $5 Net CPM = Keep Day Job
Economics of Online Video 4: Revver P&L
Why Hulu is Screwed, 1
Why Hulu is Screwed 2: Bad Economics