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Instagram video is already hurting Vine

Published Jun 24th, 2013 10:20AM EDT

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Interestingly, Vine downloads seem to already have started sliding in several key markets just a few days after Instagram began attacking it directly. Last Thursday, Instagram added a notably Vine-like video recording feature that was met with plenty of interest from users but still put Wall Street to sleep. The popular, Facebook-owned photo-sharing service now offers the ability to shoot and share 15-second video clips, mimicking the 6-second clip-sharing service that Vine pioneered last winter. Some industry observers view the Instagram attack as potentially fatal to Vine, while others see it as a lame copycat move unlikely to hurt Vine’s formidable momentum. According to Onavo, Vine is one of the most successful mobile apps in America in recent history, converting over 10% of American iPhone owners into active Vine users in just half a year.

But by Sunday, there appeared to be some signs of Vine’s global momentum suddenly dissipating. On the U.S. iPhone download chart of free apps, Vine dropped from No.2 to No.7 between Thursday and Sunday. This past Sunday was the first day since March 27th that Vine did not place on the top-5 list of most popular American iPhone apps. In another stronghold, Mexico, Vine dropped from No.3 to No.10 in three days. In its biggest European market, the United Kingdom, Vine dropped from No.5 to No.12.

Globally, Vine placed on the top-10 iPhone download charts in 11 countries on Sunday. This was down sharply from top-10 placements in 34 countries last Thursday. Or 29 countries just two weeks ago.

Of course, it is too early to declare Vine dead just a few days after Instagram began its direct assault on the micro-movie pioneer. But it certainly makes sense to track Vine’s app chart performance closely in coming weeks. Instagram has scored a lot of early victories and its media buzz is formidable. Notable achievements include 5 million video downloads in the first 24 hours and a Justin Bieber clip that already hit 1 million likes.

The past four days haven’t been a complete triumph, though. Madonna, who is now the same age as Bea Arthur when she began filming the third season of “Golden Girls,” just created a booty pop video. We’ll see in coming weeks how much damage this will do to Instagram.

After launching mobile game company SpringToys tragically early in 2000, Tero Kuittinen spent eight years doing equity research at firms including Alliance Capital and Opstock. He is currently an analyst and VP of North American sales at mobile diagnostics and expense management Alekstra, and has contributed to, Forbes and Business 2.0 Magazine in addition to BGR.