varelaFranciso Varela, YouTube’s Global Director of Platform Partnerships, recently met DTH companies in India, exploring partnerships with them. YouTube, in a sense, is trying to be the largest mult-system-operator in the world, providing video content on demand over the Internet. In a sense, it is competing with DTH players, which led us to question the rationale of YouTube looking to partner with their competitors. In the second part of this interview (read Part 1 here), we speak with Varela about why he met cable operators and DTH companies in India, and how YouTube wants to work with them:

Medianama: Why would you talk to cable providers and DTH providers? You’re trying to be the MSO via the Internet. Why would you tie up with some of these guys?

Varela: When you turn on the TV, I get my Cable provider. My live TV comes on first. Working with IPTV providers just provides us with a lower barrier to entry. Virgin media in the U.K are one of the largest cable company in the world and also our partner. Virgin Media includes YouTube as part of its electronic channel 199.

Medianama: I can understand YouTube being there but how would you work with DTH providers?

Varela: It is about solving the basic question – how do you provide the YouTube application on those boxes?

Medianama: But there is no Internet connectivity and return path on DTH.

Varela: You can still provide Internet connectivity through Wi-Fi modem or other options. The issue is not the connectivity but to make sure the boxes are capable of handling the application with a path to Wi-Fi connectivity. We see that even with global DTH providers.

Medianama: How do you plan to monetize that content going up with internet on DTH set -top box? Would you actually be willing to pay a carriage fee for YouTube to be available to DTH consumers?

Varela: I can’t about talk about economics. We are a service that is high in demand. We provide, in multitudes, much more content than the DTH provider will ever have. The wonderful thing about YouTube is that we don’t charge a carriage fee to users for our services.

Medianama: But cable operators and DTH providers in India charge a carriage fee (and they could charge you).

Varela: I can’t talk about the economics here again. YouTube is a very popular service and can tremendously add to the offering that DTH provider can give to its users. So it is a very attractive offer.

Medianama: What sort of partners are you looking to partner with in India in terms of distribution? Since there aren’t any local TV manufacturers as such in India apart from cable and DTH operators, have you been meeting only content partners?

Varela: Its been happening at two levels. We have been working with guys like Nokia and MediaTek to make sure that lower end mobile phones can play YouTube. That wasn’t happening for a while. MediaTek has its chipsets in about 40% of the phones out there, and Nokia make up a big share. With most of our other partnerships, primarily in Europe, we have addressed the hardware base: the connectable blue ray player, connectable TV here in India already have our application loaded. The next big piece will be access. So how do we work with operators? How are we a good member of the mobile ecosystem so that our videos are played more smoothly so that users are not waiting for buffering? So we’ve changed our bandwidth speeds. On a 2G network, we are streaming at 80 kb per second. That impacts the video quality, but it also ensures much quicker playback for the user.

Medianama: What were you key takeaways from your discussions with some of the cable and DTH networks here? How are they thinking about the Internet according to you?

Varela: Operators are interested in bringing YouTube technology to their platforms. It is something that is going to happen here in India. You can point fingers to a lot of reasons for it not happening like not enough broadband connections, not enough 3G subscribers, 4G hasn’t launched due to issues of licensing. However, everybody was optimistic. Internet is growing and it is going to grow. Everybody thinks that it will grow leaps and bounds in the next five years.