Verizon Wireless Could Get Boost From Video Content Deals

Verizon Wireless has signed exclusive deals to distribute user generated video from YouTube and Revver, which could provide a boost to the carrier's slow-selling mobile media service.
Verizon Wireless's exclusive deals to distribute user generated video from YouTube and Revver could provide a needed boost to the carrier's mobile media service, an analyst firm says.

Verizon, a venture of Verizon Communications Inc. and Vodafone Group Plc, said Tuesday that it plans to distribute the content through its V CAST service starting in early December. V CAST costs $15 a month, and is available on LG's Chocolate handset and Motorola's MotoKrzr.

Financial details were not disclosed in either deal, which would involve revenue sharing between Verizon and the two partners. The agreements were announced separately.

The Revver deal is exclusive for 12 months. YouTube, which was recently bought by Google for $1.65 billion, has not said how long it would distribute content solely to Verizon. But market research firm Ovum said Wednesday Verizon has "implied a minimum of six months." In making the deals, Verizon is hoping to boost usage of its mobile media service.

Ovum estimates that out of the 20 million Verizon subscribers with V CAST-enabled phones, only about 10% are willing to pay the premium for the service. Adding video content from two popular online sites, however, could help, the research firm said.

"This is certainly a bit of a coup for Verizon and should provide some pretty compelling mobile content to the heavily targeted youth market," said Ovum analyst May Ann O'Loughlin in an e-mail.

Assuming the services are available on time, the agreements are expected to give YouTube and Revver "serious wireless credibility," O'Loughlin said. Verizon also has an exclusive deal with MediaFlo for broadcast TV services, which were expected to launch this year. The service has been delayed until next year.

Initially, V Cast subscribers only will be able to download video from Revver and YouTube. Verizon, however, is working to permit the uploading of video, Ovum said.

"Users will surely be expecting video uploads, since the mobile phone is such a great way to capture people doing pretty stupid things -- a useful tool for user-generated content artistes," O'Loughlin said.

User-generated content is a key component of YouTube and Revver. The latter, however, pays content providers with a share of advertising revenue based on the viewing frequency.