Mobile App Growth Led by Video Sharing: YouTube in the Crosshairs?

Posted by Peter Farago on Tue, May 08, 2012

With the frenzy created by the speed and price for which Facebook bought Instagram, app entrepreneurs and investors are excitedly looking for where consumers will next flock within mobile apps.  In a recent report, Flurry quantified the dramatic increase in usage among social networking apps on smartphones.  For the first time since the App Store launched in summer 2008, the Games category found itself rivaled by another category in terms of time spent in apps. The rise in popularity of apps like Instagram, Path and Skout signals a new era of content consumption on mobile phones where consumers are finding new, compelling ways to spend their time beyond just games.

This report reveals emerging trends in mobile app category usage.  By studying how consumer time is shifting across app categories, we provide an early, clear demand signal.  In other words, we see where consumers are spending an increasing amount of time in apps beyond Games and Social Networking to show what’s next in mobile app popularity.  For this study, Flurry leverages a sample of 8 million active mobile app users across all app categories.  Flurry Analytics tracks more than 180,000 applications for more than 67,000 companies across iOS, Android, HTML5, Windows Phone and BlackBerry. The chart below shows the fastest growing app categories based on where consumers are spending their time.

To generate a comparison between mobile app and Internet video consumption, Flurry combined its data set with publicly available comScore Video Metrix data.  In the chart above, we show the number of minutes consumers spend per month using smartphone video apps versus Google Sites on the Internet (primarily YouTube).  Over the course of 2011, minutes spent viewing video content online grew from 276 minutes to 472 minutes, or 71%.  Over the same time period, video apps grew from 63 minutes to 152 minutes, or 141%.  While mobile app video consumption grew more than online consumption, the gap in usage at the end of 2011 was still meaningful.  During 2012, however, is where things get interesting.   As online video consumption dropped by 10%, mobile app video consumption increased by another 52%.  By then end of March, consumers were spending 54% of amount of time in mobile video apps compared to Google Sites online, 231 minutes in apps versus 425 minutes online.

While it cannot be concluded that mobile video apps are cannibalizing YouTube, the shift in time spent between these two platforms appears to be a signal of disruption. Think of it this way: With every mobile video you share of friends, family, vacations, parties and weddings, you are likely loading another bullet in the chamber for Web 3.0.  For YouTube, it appears they need to run, outrun your gun.


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