Here’s the WSJ (sub req’d) on the deal:
The agreement with Verizon is YouTube’s first major deal with a wireless carrier as it tries to extend the reach of its Internet video content beyond personal computers. YouTube, which was acquired by the Mountain View, Calif., Internet company for $1.65 billion, has attracted a huge audience for the videos on its site, which consist mainly of amateur films, home movies and clips of TV shows and musical performances.
Now YouTube is going mobile. Verizon Wireless, a joint venture of Verizon Communications Inc. and Vodafone Group PLC, will have exclusive rights to YouTube’s mobile content for a “limited” time. The companies won’t say for how long. Over time, YouTube is likely to seek similar partnerships with the other leading cellular operators, including Cingular Wireless, a joint venture of AT&T Inc. and BellSouth Corp., Sprint Nextel Corp., and T-Mobile USA Inc. . . .
For the time being, Verizon will get a leg up on competitors as all players in the cellphone industry look for content that will attract users to pay for watching videos on the small screen. Beginning in early December, Verizon will make a selection of YouTube videos available to its 57 million customers. Verizon will update its YouTube offerings daily. To get the content, consumers have to subscribe to Verizon’s “V Cast” media service, which costs $15 a month, or $3 for daily access, and only works with certain handsets.
YouTube by itself won’t lure anyone from Sprint or AT&T, etc to Verizon. But if people are already considering switching this adds to a potential list of reasons to go with Verizon.
And with mobile video comes pre-roll of course . . . That’s probably going to be a more effective mobile branding vehicle ultimately than mobile display advertising.
Consumers have shown some interest in mobile video but not anywhere near what the hype and forecasts suggest. Short form video is much better suited to mobile phones than full-length clips right now. (But see “Mobile Video: Yes or No?“)
Here’s the NY Times’ piece on the deal. Verizon is also unlikely to sell many more VCast subscriptions on the basis of YouTube content. As part of an unlimited data plan, the story might be different.
Greg Sterling is the founding principal of Sterling Market Intelligence, a consulting and research firm focused on online consumer and advertiser behavior and the relationship between the Internet and traditional media, with an emphasis on the local marketplace.