Walled Garden, Not Going Away

18 Comments

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.

18 Comments

Justin Frim

Mobile TV has been around for about 20 years now.

It’s called a little Casio or Radio Shack (or equivalent) pocket-size LCD television.

I can remember seeing advertisements for these things as far back as the 1980’s. And unlike the pathetic attempts at cellular television…

…True television is free.
…The picture quality is far superior to cell phone video.
…The frame rate is much faster and smoother. In fact, it’s just as fast and smooth as a home theater setup!
…Coverage is better, since TV stations transmit with far more RF power than cell phone towers do.

Cellular telephone television is a joke. And anyone who’s dumb enough to cough up the cash to pay for such a crummy and inferior gadget is a fool. Especially when a Casio pocket TV can be had for a ONE TIME COST of about $80… still cheaper than about 2 months worth of phone bills with mobile TV subscription.

Jim

Two keys to breaking open the telco bureaucracies hold on mobile Internet – 1) locked hardware & 2) open OS’s (not open source, just accessible by user). The former, thanks to the US Copyright Office is history as of this week (see story here – http://www.cnn.com/2006/TECH/11/23/digital.copyright.ap/index.html). Apparently the latter can be acheived in phones with Windows Mobile 5 or Linux OS’s. I am somewhat more optomistic than Om, as I believe the telco’s will not achieve successful mobile Web penetration without allowing the hardware and OS to be accessible by the entrepreneurs who have largely made the Internet the success it is today.

Jesse Kopelman

Windows Mobile might actually be the savior here. So far Verizon has not been able to lock it down — you just go into the registry and change settings. Meanwhile, Flash is coming to Windows Mobile and that should mean YouTube and other online content support. The future is about to catch up to Verizon and its ilk.

tomo

i think it is important to note that the $15 fee many folks perceive as the impending wall and shadow casting sun blocker that only lets sun in on its own garden is a fee that verizon charges any subscriber to access the internet from a mobile phone on a verizon plan. the extent that it relates to youtube is simply that youtube is accessible via an ip connection and if you want t get an ip connection on your cerizon phone you eed to pay verizon the $15.

imagine for a moment that verizon is sirrius radio and youtube is howardstern. when sirrius signed howard my sirrius rates did not go up…well, at least not immediately, it took a day…just kidding :)

verizon will continue to add services and applications to their mobile plans as the marginal utility of each new service is greater than the previous service. this, in theory will incent verizon to continue to build the value prop far beyond voice and data lines and into all sorts of opportunities. an ecosystem which provides a platform for third party companies to market their own ‘widgets’ on the platform…similar to salesforce.com app exchange.

did anyone really expect free connectivity and bandwidth would be provided to consumer so they can download rambo, star wars and hot gun? anyone catch that? :), i think services like what verizon provides today will eventually be free to consumers but only because it is being paid for by subsidization. also know as big brother is taking marketing and branding and messaging to a whole new dimension targeted and hidden so we keep thinking that kleenex is another name for tissue and not a company or that google is a company and not an action.

not to digress but is this partnership really such a big deal? can’t you just enter youtube.com into your mobile browser and go? and lastly, couldn’t they have come up with a better story on how theyll determine which videos make it to the area where wireless vrzn users will be able to download? they must have been out getting blingy, because if i were them i surely wouldn’t be worrying about the next code release, and missed how the blogosphere went borderline nutts over a reprint of kevin roses quote from 2005 re moderators?

what would be really cool social mobile app is a youtube/twitter/flickr combo community oriented service application because then it really has relevance and delivers unique content to each user. part of the compelling thing about youtube is that if i get a viewing recommendation from my buddies, i trust it will be worth watching. as good as verizon may become, it is highly probable that i never have that level of trust with verizon or any telco, mso or isp.

Pramit Singh

Youtube on Mobile will off when wifi and other technologies limit the carriers’ powers.

I ahve written about the powers of content distributors and packagers at the MediaVidea blog.

Todd Allen

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.

Rajiv

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.

Ted Avery

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.

Mark Sigal

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.

Cheers,

Mark

Visit the network garden: http://www.thenetworkgarden.com
my blog on active investing, digital media and daily nuggets of interest

alan patrick

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.

Scott Rafer

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.

Arcie

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?

Chuka Eze

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.

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