TELECOM Digest OnLine - Sorted: Verizon Wireless to Offer YouTube on Cell Phones

Verizon Wireless to Offer YouTube on Cell Phones

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Tue, 28 Nov 2006 13:44:46 -0600

By Sinead Carew and Yinka Adegoke

Verizon Wireless said on Tuesday it would deliver selected video clips
from YouTube to cell phones starting in December in a bid to increase
subscriptions to its mobile media service.

YouTube, the leading online video sharing site which was bought by
Internet search leader Google Inc. this month, said it hopes to expand
beyond computers to phones. It did not reveal the financial terms of
the deal.

Verizon Wireless, a venture of Verizon Communications Inc. and
Vodafone Group Plc, has been betting increasingly on text messaging
and advanced services like music and video for growth as phone call
prices keep falling.

But so far only a small minority of U.S. consumers use features like
video on their cell phones. Verizon Wireless hopes the huge popularity
of many home videos shown on YouTube could help boost use of its Vcast
wireless media service.

"The user-generated content space is a very important sector in
media," said Robin Chan, marketing director at Verizon Wireless, who
believes the deal could help increase its service revenue.

"Vcast subscribers tend to be higher-value customers in terms of ARPU
(average revenue per user) versus traditional voice subscribers," Chan

Under the YouTube agreement, consumers who pay a $15 monthly fee for
Vcast will be able to use their cell phones to view consumer-generated
content posted on YouTube's Web site.

Chan also said customers would also be able to post videos from their
phones to YouTube more easily than before by using a five-digit short
code instead of an e-mail address.

Verizon said about 20 million of its customers have phones that could
support Vcast. But only about 10 percent of these phone users have
subscribed to Vcast, according to estimates from Ovum analyst Roger

YouTube said the pact with Verizon was exclusive for a short
period. It did not say when it would be free to pursue additional
deals with other wireless providers.

YouTube, which gets more than 100 million views of its videos a day,
is exploring whether it can integrate YouTube into a variety of
handheld devices with Internet connections.

"Mobile is just one of the things we're looking at," said YouTube's
co-founder, Steve Chen. He did not give details.

Copyright 2006 Reuters Limited.

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