YouTube goes 'moblogging'

The future Google unit has big plans to help consumers create and share video with their cell phones. But so do a lot of competitors.

By Michal Lev-Ram, Business 2.0 Magazine writer-reporter

(Business 2.0 Magazine) -- The mobile phone industry got some leftover Halloween treats this week. Red-hot startup MobiTV landed another $30 million in funding, bringing its total cash horde to more than $100 million. And YouTube said it would add its popular video-sharing features to mobile phones.

That's two big announcements from two key players. But which company is likely to have more success? YouTube, for reasons that have little to do with the company's $1.65 billion sale to Internet goliath Google (Charts).

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Here's the reason: Consumers want to share content more than they want to watch TV shows on their cell phones. At least that's what they told In-Stat, a technology research firm, this summer. Sending a clip of Junior's soccer match to Grandma, it seems, is much cooler than watching the latest 'mobisode' of "Desperate Housewives" on a two-inch screen.

At the tone, leave a video-mail

"It was striking to see how strongly people feel about using video to communicate," says David Chamberlain, the In-Stat principal analyst who conducted the consumer study.

On Wednesday, YouTube CEO Chad Hurley told attendees at an advertising conference that the video-sharing site will allow users to send clips to other YouTube members within a year, according to a Reuters report. YouTube users already can upload clips from their phones to the company's site and then watch from their personal computers.

Hurley told the advertising execs that video-sharing via mobile phones is an obvious next step for the company. "[I]t's going to be a huge market," he said.

'Moblogging' - the industry term for the nascent mobile user-generated market - is expected to reap $13 billion a year in advertising and subscription revenues come 2011, according to Informa Telecoms & Media, a research firm.

A rough start, but the timing could be right

YouTube's push into the mobile market is both good and bad news for entrepreneurs like Alex Kelly, the CEO of San Francisco startup Veeker.

On the one hand, it validated Kelly's vision. So far mobile operators have had a hard time offering inexpensive, easy-to-use and fast services that consumers can use to share images and videos captured with their cameraphones. Only about 50 percent of U.S. mobile phone subscribers with built-in cameras actually snap photos. Even worse, a meager 3 percent shoot videos.

"There have been barriers," concedes Kelly.

Not surprisingly, Kelly thinks that technology has overcome the obstacles. In late October, Veeker rolled out a free service that lets users publish short video clips, which the company calls "Veeks," taken with their cell phones. Registered users can then send their output, via Multimedia Messaging Service (MMS), to Veeker.com and other sites that accept HTML embed codes, including MySpace and Blogger.

Veeker members have used the service to leave "video voicemails" for friends and to create personal video diaries.

"Mobile video is very immediate, and that's what people are looking for," says Kelly, who's betting the advertising revenues, both on Veeker's website and embedded in videos, will sustain it. "I think [demand] is going to grow a lot faster than people predicted."

YouTube: the kiss of death?

Veeker isn't the only company hoping to work some moblogging magic. Tiny Pictures, based in San Francisco with $2.8 million in funding, just launched Radar, a service that lets users publish photos on its website or to a closed network of friends. Meanwhile, registered users on JuiceCaster can use their cell phones to post to weblogs and social networking sites.

Juice Wireless, the two year-old New York shop that operates the JuiceCaster network, is teaming with College Tonight, a social network that will use cameraphones and video to help college students stay plugged in to their local social scene (brace yourselves, parents, for public videos of fraternity toga parties).

YouTube's move into mobile video could be a boon for startups like Veeker. Rivals could start scouting for their own mobile video service - and that's always good news for smaller players looking to be acquired.

But it could also mean bust for these upstarts. Where YouTube goes, cutthroat competition follows. Jill Aldort, a senior analyst with Yankee Group, says Veeker at al. will have to move fast to avoid getting crushed.

"YouTube has the critical mass, and it's hard to create a social network from scratch," explains Aldort. "If the little guys can get in there and launch services faster than YouTube, they'll have that going for them."

The biggest risk of all? Mobile video will never live up to expectations. That's the prediction from Ken Hyers, an ABI Research senior analyst. Hyers estimates there will be a scant 655,000 mobloggers worldwide at year-end. He expects that number to quadruple to 2.7 million by 2011. That's just a fraction of the estimated 3 billion mobile phone users around the world.

"For most people there's simply not enough going on in their lives that they're going to be uploading pictures on a regular basis," Hyers says in a statement.

Maybe those were tricks in the Halloween goody bag after all. Top of page

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Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer LIBOR Warning: Neither BBA Enterprises Limited, nor the BBA LIBOR Contributor Banks, nor Reuters, can be held liable for any irregularity or inaccuracy of BBA LIBOR. Disclaimer. Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.