It makes perfect sense. Carriers are vying for customers and lack any rich-media content beyond annoying ring tones. Video sites need growing distribution to substantiate their business models and delay disintermediation.

For the past year, Verizon and other wireless carriers have been quietly circling the independent film scene; knowing they needed short-form content but lacking any traction in this emerging medium. Now the carrier has decided to enter the market with help from a company that has developed learnings, content, eyeballs and a brand.

All the Permanence of a Britney Spears Marriage

YouTube and Verizon have released very few details about the terms of this exclusive agreement -- the revenue approach, the financial split, the duration of the agreement. We don't even know if YouTube will automatically release its full body of videos, or license select videos with specific constraints. The active YouTube video creators are now desperate to be featured on the new vehicle. If getting featured on YouTube's homepage was cool, imagine being the first to get prime real estate on someone's cell phone.

One thing's clear. This YouTube/Verizon deal is nothing more than a pilot, and the initial exclusivity will last as long as a Britney Spears marriage. YouTube will pursue additional distribution opportunities early in 2007, and Verizon will recognize that YouTube's brand power can help sell phones and services, but that YouTube has no sustainable lock on the vast amount of video content that mobile users will demand.

More importantly, no advertising approach has been announced. Subscriber revenue will not be the only source of income for Verizon Wireless and YouTube.

2007 is The Battle Year for Mobile Video

If 2006 was the year online video went mainstream, 2007 will be about two things. The distinction between television "lean back" and online "lean forward" video viewing dissolves next year. And 2007 is the "battle of mobile video." A gloves-off fist fight for content, eyeballs, and advertising revenue. Betrayed alliances will surpass those of an entire season of Survivor.

The implications to consumers are many. First, we will have a new consideration when selecting a cell provider. "Sure they get me fantastic coverage at a low monthly rate. But they don't give me my LonelyGirl15." Eventually, all cell phones will have the ability to access videos on any websites (some with a premium cost). I don't believe our cellular service provider will determine what video sites we're allowed to watch any more than our cable provider. But each carrier will have its own methods for making mobile viewing delightful or torturous.

What Will We Watch on Our Tiny Television Sets?

The mobile video revolution will have several pronounced eras. First, we'll be clamoring for anything short and outrageous enough to make the initially painful viewing experience worthwhile. Next we'll be sending videos to each other privately. "Mom- come home soon. Patrick hit me. Watch." Small scale events (like a racist comedian caving to hecklers) will be captured and uploaded instantly. Victims of news events will capture the footage before media arrives, and many will make significant money selling the video to networks or participating in the advertising revenue generated by views. There also will be a period of pirating of copyrighted material, but it won't last as long as it has in online video. Eventually I hope this spawns a new type of story telling and inspires video creators to experiment with new methods.

The "tipping point" in adoption of mobile viewing will be when even basic phones are enabled with more broadband, default video cameras and players. In Fineland and Japan, mobile users are now enjoying streaming video that's faster than what we're getting on your Cable or DSL. The US mobile providers will be on a race not just for hot YouTube content, but to improve mobile bandwidth, enhance display devices, and provide user experiences that surpass competitors.

Ultimately mobile video will change not just the means and location for consuming video; it will shape the way video creators produce. We'll need shorter, serialized content. We'll need tighter camera shots and better audio. While our televisions are getting larger and resolutions are getting higher, much of our video consumption will be crude because it's easier to access and share great moments. Most of us started creating for film or television. Then we shrunk for kiosks. And we dropped even smaller for web video. So we're ready to shrink for phones, but hoping that video watches arrive as soon as the flying cars and jet packs.

The Deals Ahead

Watch for additional partnerships with obvious players. Yahoo/Cingular or AOL/Sprint, are potential next steps. Some of the smarter telecommunication providers will realize they can benefit by partnering or acquiring a firm that's already matching advertisers with creators -- firms like Revver, Metacafe, blip.tv or Brightcove. Revver, for instance, pays affiliate fees, so a carrier can provide content to its customers and derive a new revenue source.

The Verizon and YouTube partnership is power partnership because it's the combination of two strong brands both with large audiences. So it legitimizes the convergence of online video and mobile phones and sends a signal to investors and consumers. Expect Verizon/YouTube's flame to glow bright and fade fast. But it's the beginning of an important evolution, and for those of us watching Japan and Finland's latest toys with envy, it's nearing the end of a long wait.