Can Daily Motion Challenge YouTube?

Ce n'est pas tous les jours que les médias US mettent à la Une les entrepreneurs français; aujourd'hui donc Daily Motion à l'honneur dans BusinessWeek online Europe

As the video-sharing phenomenon spreads worldwide, one of the few local sites to tackle the YouTube behemoth has emerged in the heart of Old Europe. With 9,000 new videos pouring in each day and daily page views surpassing the 16 million mark, Paris-based site Daily Motion looks poised to grab a piece of Europe's fastest-growing online audience.

It's not surprising that France, with its strong cultural and linguistic identity, should give rise to a non-English video-sharing site. In fact, Daily Motion (www.dailymotion.com) actually was online before YouTube, which formally became a part of Google (GOOG) on Nov. 14. "Any country that has its own language is absolutely ripe for specialized content," says Mark Mulligan, an analyst with Jupiter Research in London. "There's a clear opportunity for the competition to steal a chunk of the French market."

The question is, how much? Despite its late entry into France, YouTube already has managed to grab 9.1% reach there, compared with 10.3% for Daily Motion, according to figures from market tracker comScore. Across Europe, YouTube has around 10% to 12% reach, vs. 2% for Daily Motion. About half the video clips on Daily Motion are in French, with many of the rest in English.

Outflanking Google

Of course, Daily Motion dreams of big growth. But in recognition of YouTube's clout, it is also adjusting its strategy to exploit other opportunities. That includes enabling uploads to the site directly from Webcams (something YouTube hasn't done yet), and drawing heavily on local content—say, highlights of the latest Perpignan-Béziers rugby match, or presidential hopeful Ségolène Royal's most recent TV interview.

"It would be foolish to claim we can compete directly with Google," says Philippe Collombel, a partner at venture capital firm Partech International, who sits on Daily Motion's board. "We want to do something different, more European, more creative." To fire up growth, the company has raised just under $9 million in venture capital from marquee names Partech and London-based Atlas Venture.

One of Daily Motion's most intriguing moves to date is a deal with leading French TV station TF1. The startup has developed a Web site for TF1 called Wat TV, where users can post and view videos. Starting Nov. 17, the best clips from Wat TV (www.wat.tv) will be broadcast every Friday morning on TF1, thus linking online and traditional video in a way that YouTube hasn't done internationally.

Targeting Francophones

That may run counter to a trend in the video-sharing market toward fragmentation and more specialized sites. But Daily Motion also could benefit from this trend if it becomes the undisputed francophone video-sharing destination. "There's more than one way to succeed [with Web 2.0 sites]," says Josh Bernoff, a media analyst with Forrester Research in Boston.

Some sites will go for sheer size, à la MySpace (NWS). Others will chase niches. Concludes Bernoff, "It's a mistake to say that if you're not as big as YouTube you haven't got a business."