Mobile Phones Catch Viral Bug

Dec 4, 2006  •  Post A Comment

The nascent mobile television business landed a big seal of approval last week when Verizon inked deals with viral video sites YouTube and Revver to deliver clips over the phone company’s V CAST service starting this month.

Verizon’s new pacts could quiet critics who have charged that mobile TV won’t be a meaningful business in the United States, industry experts said last week.

The YouTube deal in particular will likely be a watershed moment for the mobile TV business because viral videos can supercharge mobile video usage, said Adam Guy, managing director with consulting firm Compete, who heads up the firm’s wireless practice. Mr. Guy expects consumers to want to watch these videos on-demand on their phones. Viral videos fit with the mobile appetite, and users will tell their friends, he said.

“This sets a framework for viral marketing of mobile TV and that’s what it needs to take off,” Mr. Guy said. “That’s how all these other things have taken off, like text messaging.”

The short-form videos typically featured on YouTube also fit nicely into the model that’s worked well to drive mobile TV adoption to date, said Kanishka Agarwal, VP of new products for mobile research firm Telephia. Revver will supply viral videos to V CAST customers from categories including Viral Video Classics, Extreme Sports, Animation and others.

The most-watched mobile videos are typically quick snippets in news, weather, sports and entertainment, he said.

“The mobile phone lends itself well to being able to deliver user-generated video,” he said.

Mobile TV has been growing quickly this year. The United States counted about 5.1 million mobile video subscribers in the United States at the end of the third quarter, double the number of subscribers at the end of the first quarter, he said.

Also, the mobile video business generated nearly $141 million in the third quarter, roughly on par with revenue for mobile games, a business that’s been around much longer.

“The YouTube deal should drive more and more consumers in and will continue to drive that growth,” Mr. Agarwal said.

Also by inking deals with two major online video players in one week, Verizon sends a signal to the market that it plans to be aggressive and carve out a leadership role in delivering mobile video.

“All the service providers in this wireless marketplace want to make sure they don’t just become a commodity … they want to make sure they have a differentiated product and moves like this help. It spurs competition,” he said.