According to WSJ.com (subscription required), Verizon is “in advanced talks with YouTube” to show YouTube video content on cellphones and cable TV. Here’s how the deal would work: Verizon customers would be able to view on their cellphones the top 50 to 100 videos from YouTube at any given time. Verizon hopes that by the end of the year users would be able to upload videos to YouTube that are directly shot with a Verizon camera phone. Also, if the plan goes through, as early as the beginning of next year, users would be able to view YouTube videos “on demand” through Verizon’s new TV service. The company is thinking of charging users a “small fee” to access top YouTube videos of the day via Verizon’s TV services with the revenue shared between the two companies.
Verizon is just getting into the newly popular communication bundle of phone, Internet, and TV services. As of the end of September, Verizon has 522,000 customers for its fiber-based Internet service and 118,000 TV customers. The company has already begun a massive effort to upgrade its network in an overhaul expected to cost $18 billion through 2010. The deal in the works would give Verizon the exclusive right to broadcast YouTube videos for a limited time. But the talks are still in the works.
Verizon’s TV service really isn’t much different from other digital cable services, making a deal with YouTube an opportunity to distinguish itself. Being the exclusive YouTube provider might attract YouTube’s younger generation of avid fans.
But back to viewing YouTube on a cellphone… The videos would be available through Verizon Wireless’s premium V Cast service, which currently costs Verizon users an additional $15 a month. Verizon, like many cellphone providers, is trying to attract new customers with broader product offerings including games, songs, ringtones, videos, etc. YouTube videos would give Verizon an advantage over other networks while giving current Verizon customers a reason to upgrade to the premium V Cast service.
The talks between Verizon and YouTube is another sign that media companies are trying to capitalize on Internet-based entertainment. Amazon, Apple, and Microsoft have all recently announced video download services while Comcast has also been in talks with YouTube. Though Comcast is now leaning toward offering its own video-sharing service through its newly launched Ziddio.com site.