There is barely any reason for a single media company to be in the online video content business. Google Inc.’s (NASDAQ: GOOG) YouTube has such a huge presence that it sucks the air out of the video content room. The shadow YouTube casts makes it impossible for premium video sites to ever become very large. And, it dwarfs the video efforts of the major online portals.
New comScore data for December show that nearly 182 million unique visitors watched 38.7 billion videos in the United States — in just that one month. YouTube, or the “Google sites” as comScore Inc. (NASDAQ: SCOR) calls them, had 153 million unique visitors. These people watched 13.2 billion videos. No other site or company was even close based on these measures.
Facebook Inc. (NASDAQ: FB) is in second place in unique visitors and video views, according to comScore. It had 58.8 million unique visitors who watched 420 million videos. Yahoo! Inc. (NASDAQ: YHOO), AOL Inc. (NYSE: AOL), Microsoft Corp. (NASDAQ: MSFT) and Viacom Inc. (NASDAQ: VIAB) fell well behind Facebook. Hulu was not even in the top ten. Each portal and media company counts on traffic to video content to sell video ads. This may be a good business, but if YouTube continues to build a substantial presence in the industry, the fallout on competition will be extreme. It is not unlike Facebook’s presence in display advertising, where it has more than a quarter of the business nationwide. But YouTube’s presence in video is much bigger than that.
YouTube’s dominance may be even greater based on another measure. The average visitor to YouTube and Google sites watched 388 minutes of video in December. Among portals and media sites in the top ten, AOL was next with 55 minutes. Facebook’s number was 16 minutes, which is barely enough time to support any significant video advertising inventory.
Video ads and paid content were supposed to create needed revenue for portals and media companies. YouTube’s size has made it impossible for the goal to completely accomplished.