LONDON -- Digital Futures -- Its very name evokes the idea of people watching content they have actually produced, but YouTube is losing out to other web players targeting the market for personal video footage, including Facebook and Snapchat, according to a leading analyst.
Rob Gallagher, who heads up research for Ovum Ltd. 's media, entertainment and consumer portfolio, is decidedly downbeat about YouTube Inc. 's prospects in this market segment, citing a number of perceived shortcomings and fierce competition from other companies.
"YouTube won't be dominant in the way everyone assumed it would be," Gallagher told attendees at Ovum's recent Digital Futures event in London. "It's not a great place to share videos. It's not a great place to talk about videos. It's not particularly instant or mobile or social."
The Ovum expert predicts that YouTube -- a subsidiary of search engine giant Google (Nasdaq: GOOG) -- will increasingly focus on being a "home" for professionally produced content as well as the "semi-professional" content that leading video bloggers (sometimes called vloggers or even YouTubers) are uploading, often in return for lucrative advertising deals.
"They'll miss out on personal videos -- the videos you now see on Snapchat will never turn up on YouTube," says Gallagher. "YouTube has introduced a community feed designed to ape the social context but we're not sure it's really enough. That crown will be claimed by someone else."
Quite simply, Gallagher thinks sites like Facebook and Snapchat are doing a much better job than YouTube of appealing to a younger audience developing what he calls "personal videos" for their own consumption.
"Personal video capture on mobile devices," as he describes it, will be an area that attracts huge interest in the next few years as major smartphone players like Apple Inc. (Nasdaq: AAPL) and Samsung Electronics Co. Ltd. (Korea: SEC) look to offset a slowdown in device sales.
"The smartphone boom is coming to an end," says Gallagher. "Annual sales growth will fall from 30% in 2014 to 3% in 2020. We'll see Apple and Samsung try to piggyback on TV and pushing devices where video is a key feature."
This development is a potentially troubling one for telcos, according to Gallagher, because of the network investments that will be needed to support growing demand for video content.
According to a recent Ovum survey of 15,000 consumers across 30 different markets, around 80% of consumers are watching online video on a regular basis but fewer than a half of those consumers said the video experience was either good or excellent. "Operators face a problem because consumers are more likely to churn," says Gallagher. "And they need to realize video is lifeblood, even if delivered by OTT players."
Ovum is also forecasting that a "personal video capture" market will give rise to an array of new devices designed to record personal experiences, including drones, wearables, robots and even connected toys.
— Iain Morris, , News Editor, Light Reading