Big Mobile App Growth Slowing, Neflix (NFLX) Under Intense Competition, SnapChat on Fire - Nomura (FB) (TWTR) (GOOGL)

In his 'App Wrap', Nomura analyst Anthony DiClemente noted that a lot of larger apps, including those from Facebook (NASDAQ: FB), Google (NASDAQ: GOOGL) and Netflix (NASDAQ: NFLX), are beginning to see a greater slowdown. This is important, he said, as apps representing ~85% of total time spent on mobile. He said the importance of app trends is difficult to understate, as app user trends have major implications for industry and company-specific shifts in consumer behavior, and ultimately advertising spend.

Specificaly on Netflix, DiClemente noted that domestically, Netflix is facing growing competition from other mobile premium video providers, including Amazon, Hulu, HBO NOW, and Showtime, which now in aggregate account for more app downloads than Netflix does. Internationally, Netflix maintains a large lead over other SVOD players, although the growth trajectory of markets launched in 1Q16 appears difficult to sustain, according to the data (perhaps owing to lower broadband penetration and language barriers for these markets). Despite a slowdown in newly launched country cohort downloads, Netflix has experienced strong YoY app download growth in Western Europe in 1H16.

His other big takeaways were:

Takeaway #1: With few exceptions, slowing app download growth is a reality in the US - Across the top 15 apps in our coverage, total global downloads declined by 3% YoY in May 2016...

Takeaway #2: Snapchat continues to gain momentum - For the first time, Snapchat downloads have surpassed Facebook’s properties in the US, demonstrating acceleration in growth; all other major social media download trends were characterized by YoY declines...

Takeaway #3: Netflix competition intense, with certain international cohorts starting to slow

Takeaway #4: Media downloads highly contingent on the availability of key content

Takeaway #5: Spotify showing solid momentum over Pandora both in the US and abroad

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