Fred Wilson’s assessment of the YouTube-Verizon Wireless deal is spot on. The limited amount of YouTube inventory over Verizon wireless network and devices, “violates the entire ethos of YouTube, not free, not open, exclusive, no community, limited, censorship, etc, etc.” The likelihood of such a deal […]

Fred Wilson’s assessment of the YouTube-Verizon Wireless deal is spot on. The limited amount of YouTube inventory over Verizon wireless network and devices, “violates the entire ethos of YouTube, not free, not open, exclusive, no community, limited, censorship, etc, etc.” The likelihood of such a deal has been talked about for a while.

Despite Verizon network’s superior quality, I refuse to subscribe to them, because their (deck) interface, regardless of the phone, is the mobile equivalent of Chinese water torture.
The thought that Verizon would decide what YouTube video gets shown on the mobile makes me shudder. (For better options, we have some recommendations for you, which are more fun, to say the least.)

Steve and Chad need to answer one more question: Verizon is making money from the network; YouTube is likely profiting from this deal, but are they sharing the goodies with folks whose videos will end up on Verizon handsets?

The agreement shows that the wireless carriers will continue to maintain an iron-fist like control over their networks; showing the cunning of a Night Club bouncer, deciding when and who is allowed to cross the velvet rope. When a brand as big as YouTube has to fall on its knees and play ball with Verizon (on carrier’s terms), what chance do others have?

Frankly, that is not going to change. The utopians are looking at 3 X-Series as a sign of a revolution, though in the end it might be a simple mutiny by a company, whose financial quandary might have something to do with its decision to break ranks with the global mobile oligopoly.

The Silicon Valley folks have complained bitterly about this exclusive strategy. “I think it’s inevitably just a matter of time before general IP and open protocols get to mobile phones,” Reid Hoffman, CEO of LinkedIn said at a recent event at Oxford University’s Said Business School. “I think a lot of people in Silicon Valley are agitating to work out ‘how do we take the dam down faster?'”

Others like Matt Cohler of Facebook and Chris Sacca of Google expressed similar frustration, but complain as they may, in the wireless world their network neutrality, open network argument is not going to fly. Given the billions of dollars they spent on spectrum, and building those networks, carriers want to milk their profit machine as much as they can.

The walled garden will remain just that – albeit with heavily barred windows.

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  1. Om,

    I completely agree with you. U.S carriers, especially Verizon have hindered the growth of mobile services in the United States for way to long.

    YouTube’s mobile approach is is flawed, especially by deciding to partner with Verizon. What value does Youtube have in limiting the reach of their content? It would be funny if only a small percentage of Youtube users are actually on Verizon.

  2. Let’s be clear. YouTube has been and is in the business of skirting copyright laws. The DMCA makes it nearly impossible for any content owner to truly monitor and “takedown” content. Just because YouTube has gotten away with it thus far does not mean they are bold enough to take what the know to be copyright content and put into on a wireless carrier and get paid for it. Take viacom for instance, they receive fees from carriers for MTV content, now YouTube is going to take that same content and sell it to Verizon.
    How is that going to work?

  3. My bet is the oligopoly stands for another decade or so. By then, open wireless systems will have gotten good enough to break the spectrum licensees down.

  4. Re WEalled Gardens – anyone remember when AOL and CompuServe and Prodigy and Delphi and so on were called Online Service Providers, and all the analysts wrote glowing reports of their futures?

    Deja view!

    As to YouTube doing the deal…well, what did y’all honestly expect – this is the game they have to play now.

  5. Om, I think the reality is that relative to the “jobs” that people hire their mobile devices for — reliable voice, good enough email and IM, small form factor apps and basic web browsing — the mobile providers aren’t under serious pressure to open up.

    Until a disrupter starts eroding Verizon’s business, they will remain walled garden-ish, IMHO.

    I’m in the online video space (CEO of social networking for video platform provider, vSocial.com) and a Verizon customer, but the simple fact is that I gauge them based on reliable voice and email. Everything else is gravy.



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  6. Until better codecs are used for mobile video I don’t think it matters much. By the time mobile video watching becomes tolerable enough in the states to make it a market worth monetizing their exclusive deal will be finished and better options will be available anyway. The key to all of it is in browser media player plug ins.

    I don’t care if it’s flash, WMV MOV or whatever else, playing media has to become easy via a wap page for this conversation to matter. Until then, user generated video on mobile doesn’t matter. The problem with UGC is you have to click on at least a few duds to get one gem. As long as those duds load slow and are hard to click out of to get to the next one quickly then not many people will care.

    Here’s a tip for all you carriers & mobile media barons, get the premium stuff right before you try to get the fancy stuff. Truthfully, Comedy Central, ESPN & E! should be leading this space and attracting people to mobile TV viewing. Given The Daily Show & Colbert’s popularity and demo they should be leading the way in ad supported mobile TV which spurs data uptake. If they haven’t made an impact do you really think Brookers is going to spur America to pay the extra money for a data plan? Think again.

    Oh, one more thing, I don’t know what kind of crack you guys are smoking to think that people are willing to pay another $4.99 on top of the $15+ dollars in data for EACH channel they want to see but it must be good. People barely want to pay $6 for phone insurance or nights and weekends. Mobile TV should be free. Once it becomes entertaining and free you will see widespread sign ups to data plans… but alas, it’s neither. YouTube will just add more hard to view crappy clips to the pot for an even more frustrating mobile tv experience.

    Thanks guys.

  7. I believe the new term is “American water torture”.

  8. We had a speaker at Mobile Monday Bangalore once from the Operator’s side once and we brought up the walled garden question. Their answer was let’s compare; cost of network on one column and what others have done for it on the other. The one with the bigger number wins.

    Their walled gardens are never going to open up. Someone please lay a parallel network.

  9. Can Apple change all that with their rumored Iphone ?

  10. I think ragging on YouTube is unnecessary here. Google wants YouTube to become (more than it is already) the place for user generated videos.

    To do that, distribution is the key, and the carriers hold those keys in the mobile world. Carriers make money (and share money) based on a) data consumed, and b) airtime. Think about what this means for YouTube!

    Pre-acquisition, everyone claimed that YT was in trouble due to the huge data costs. In mobile, huge data means huge revenues, it’s a perfect fit.

    Only selecting certain videos to display is almost certainly due to Verizons worries about online porn and copyright violations, but how upset should that make you? On a more pragmatic note, the mobile interface isn’t suited to having 10 million videos to search through. Much better to have 100 that are known to be “good”, and probably lend themselves to targeted marketing.

    It’s only a walled garden because it makes more money for Verizon and stops lawsuits.

    Do people really want a non-constrained YouTube of mobile? I know people who have a platform that would enable that in about 2 months time. I’ll introduce you.

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