Coming soon to a wireless phone near you: A 32-second clip of a tawny cat massaging a sleeping puppy?
That cat-and-dog clip, posted by one “tubemaya,” was one of the top-rated video clips on Google's YouTube site last week — and such fare will be featured on Verizon Wireless's V Cast video-on-demand service starting this month, along with content from another user-generated video site, Revver.
Verizon Wireless last week announced deals with YouTube and Revver to distribute each site's most popular clips to V Cast subscribers. Financial terms of the deals weren't disclosed.
LIMITED EXCLUSIVES
Both agreements give Verizon Wireless exclusive U.S. mobile distribution rights for a limited period of time. YouTube wouldn't disclose the length of its deal; Revver said its exclusive contract with Verizon is 12 months.
The deals are part of Verizon Wireless's push to differentiate its mobile-video offerings, while also temporarily preventing rivals such as AT&T and Sprint Nextel from tapping the trendiest “user-generated” video content sluicing out of the Web today.
“This is certainly a bit of a coup for Verizon Wireless and should provide some pretty compelling mobile content to the heavily targeted youth market,” said Mary Ann O'Loughlin, an analyst with telecommunications research firm Ovum.
But Ovum estimates there to be only about 2 million V Cast subscribers, whereas an estimated 20 million of Verizon's 57 million customers have V Cast-capable phones. “The killer video app is still out there lurking in the bushes,” O'Loughlin said.
The YouTube and Revver clips will be available through the V Cast VPak subscription, which costs $15 per month for access to up to 1,000 clips from content providers that include ESPN, Comedy Central and NBC Universal. Still, that's “a hefty monthly price premium even if you get the V Cast phone as a holiday present,” O'Loughlin said.
Content supplied by YouTube will focus on user-generated content, and will be a “rotating, refreshed set of YouTube clips determined by YouTube,” said Jeffrey Nelson, executive director of corporate communications for Verizon Wireless. The clips will be available on a separate YouTube channel on V Cast.
Revver-supplied clips will be refreshed twice a week. Revver will also create a “V Cast Collection” section on its site, which will let V Cast subscribers view the clips online.
In its deal with YouTube, Verizon Wireless specifically wanted to steer clear of copyright-infringement issues. The wireless operator has required that all YouTube-supplied content have appropriate licensing arrangements, according to Nelson. He added that YouTube content must meet Verizon Wireless standards, meaning that sexual and violent videos will be prohibited.
Google closed its acquisition of YouTube — a transaction worth more than $1.7 billion — in November, and has set aside 12.5% of the equity from the deal in escrow to deal with possible future copyright-infringement lawsuits.
Some of YouTube's most popular content is culled from cable and broadcast TV shows, like Comedy Central's The Colbert Report. Google is currently engaged in talks with media companies to resolve licensing issues for such video content.
RESPECTS COPYRIGHTS
Meanwhile, Verizon Wireless partnered with Revver “because of its well-known respect for copyright and for the selection of high-quality video content it attracts,” John Harrobin, the wireless carrier's vice president of marketing, said in a statement.
Revver offers video contributors 50% of the advertising revenue earned from their content. No ads will be sold against the Revver clips offered through V Cast, but Revver will share revenue it derives from the agreement with content producers.
Investors in Los Angeles-based Revver, which has received $12.7 million in two rounds of funding, include Comcast Interactive Capital, Turner Broadcasting, Draper Fisher Jurvetson, Bessemer Venture Partners, Draper Richards and William Randolph Hearst III.
