Netflix losing marketshare to Amazon

Netflix remains the runaway alternative TV provider in the US, but Amazon is growing at a faster rate, according to new research...and check out the low approval ratings.

US-based 451 Research regularly surveys US consumers about the non-traditional TV services for which they are paying. Netflix remains the market leader by a large margin with 82% of respondents paying for the service. However, that is down on the 84% recorded in February and comes as Amazon records large gains.
Amazon’s share jumped from 17% to 22% across the February-September period. Apple’s iTunes increased its share from 15% to 16% and Hulu’s premium service Hulu Plus’ share was up from 6% to 8%. There was a marked increase in the number of consumers paying for Amazon Instant Video and Netflix. The proportion paying for both services jumped from 14% to 18% across the period.
“While Netflix still holds the largest share by far of the paid alternative TV market, consumers continue to shift towards Amazon’s Instant Video service,” said Andy Golub of 451 Research’s ChangeWave service. “As Amazon’s TV and movie content becomes more competitive with Netflix, its popularity is surging among consumers.”
In terms of customer satisfaction, iTunes was the clear leader with a 35% approval rating. Netflix recorded a 23% rating and Amazon and Hulu Plus 22% and 20% respectively. Apple’s iPad took over Blu-ray players as the device used most often to watch streamed content.

Viddy...how many users do they really have?

As someone who's tracked and run Internet video startups, the massive growth of Viddy earlier this year impressed me but also set off my "it doesn't seem right" gut instinct. Now that I'm no longer heads down running www.synctv.com, I had a little time to really dig into this.

So how did Viddy go from 15,000 uniques/month* (quantcast) in March to over 1M uniques/month in April, less than a month later? I've seen this happen many times before, but not in the "create a video and upload it" space Viddy, Tout, SocialCam, etc play in. As interesting, how did Viddy crash so hard only a couple months later? Was it a fad? Did something else affect their popularity?

Video is not like photos. A picture is fast to upload and fast to "consume". Video takes a lot longer to create (at least interesting videos!) and take a lot longer to consume. As anyone who's posted a video knows, it's not easy to create an engaging video your friends/family/social network will actually watch.
So back to my question: how did Viddy grow and then shrink so fast?

I looked at a number of factors, and the most likely scenario I've discovered is this. Viddy's growth happened at the same time as their integration with Facebook's open graph API and when Facebook wasn't restricting how many layers of friends would be exposed to the video. Even better (or worse, depending on who you are), the various user tracking companies (Alexa/Quancast/Compete) seemed to count every single person who got/clicked the video as a Viddy "user". In other words, I upload a Viddy clip I made to Facebook, and all of my friends see this instantly. Then, if they click on the video, my friends' friends could (depending on your settings)  also show up as Viddy "users". As you can imagine, this leads to massive virality.

But should someone who's not even signed up or using Viddy be counted as a user? I argue that the only true users are those who either create content using Viddy's service and/or regularly use the Viddy site to view videos. Someone who get's a video they know nothing about shouldn't be counted as a Viddy user, should they? At the very least, knowing how many users are really using the site vs users who just got the video because of Facebook's API implementation, is important to measure Viddy's true growth.

Now how about that steep drop off? Well, interestingly enough, it also coincides with Facebook's tightening of its API virality. Viddy videos will now no longer penetrate several layers of "friends of friends", and voila...Viddy is back to a steady state of 60,000 uniques/month for the past 3-4 months.

So hats off to Viddy for getting investors to plow money into them based on...um...creative user numbers. They have a lot of smart people there, and now have a large rainy day fund. I'm sure they'll reinvent themselves and get those numbers up again. I just hope that next time, the growth comes from actual users of their service, not these amped up numbers.


*Yes, I know, all of these tracking services are inaccurate, inconsistent, etc. However, used as a rough traffic guide, they do the job...somewhat.