For those of us with enough grey hairs to remember the great browser wars of the 90s some of the recent developments in online video platforms may start to sound a little familiar. If not – bear with me and hopefully I’ll make my case.
from Miss Rogues Flickr Stream
The biggest anti-trust case that was brought against Microsoft was due to the fact that their browser – Internet Explorer – was bundled into the operating system (wikipedia article). This killed off competition as Netscape and Opera fumbled for the keys to the castle while IE was safely ensconced in the great hall eating, drinking and having a ball. IE now has competition and its market share has been steadily dropping as Firefox, Safari and Chrome nibble away at its lead through performance and usability improvements. Microsoft has a dominant position in terms of operating systems for PCs and abused that to stifle innovation at rival companies.
I read this article and it got me thinking. If YouTube is already embedded into a phone or into the new Chrome OS when it debuts, then does that put a rival such as Vimeo into difficulty. There is no doubting that YouTube has a dominant market position with a 40% market share (via Mashable and ComScore). This doesn’t seem dominant until you factor in the fact that the next largest video site has a 2% market share. What YouTube does and says changes the market, for the most part this is beneficial to the user – I like HD, I think annotations are interesting and I like the idea of skippable pre-rolls. In the long term however they are building an unassailable lead that really doesn’t need to be assisted through the bundling of the YouTube player into devices and future operating systems.
I like Vimeo, I think that their product is excellent, it is uncluttered and the place where most people serious about video production place their showcases. Their playback is excellent and the HD seems to be as good as you can make it on a computer screen. Is there a case for bundling Vimeo into an OS? Probably yes. The iPhone population and the Vimeo clientele would seem to form a pretty coupley venn diagram and soon you should see an app for Vimeo. Every android phone comes with YouTube as an embedded app, every Apple TV comes with the ability to watch YouTube videos and the iPhone comes with a YouTube app installed. Does any other video site have the clout of YouTube? No. Can any other video site sign the partnership deals that YouTube can? No. Does that put YouTube in a dominant position? Absolutely, it does.
As a wise man who used to run Sun Microsystems once said ‘Innovation happens elsewhere’, it might be Vimeo, it might be Facebook, Metacafe, Dailymotion or any of the other video sites that out-innovates YouTube in the medium to long term but in the current market YouTube will find it quite easy to maintain its market share.
But as Valuev found out, if you are the biggest guy in the ring, with the heaviest weight and the longest reach then in the long run you can still get beaten by the little guy, even when he’s broken his hand on your head in the second round.
