A Google-Verizon Deal Could Cripple Web Video Innovation

Right now, it’s unclear where Verizon (s VZ) and Google (s GOOG) are in their discussions to end net neutrality, and under what terms the telco would grant preferential treatment to certain types of content and for what price. Although Google and Verizon now both deny that such a deal is in the works, it’s clear that any prioritization of paid web traffic would have a devastating effect on startups and video publishers that don’t have Google’s deep pockets to pay for the privilege of better access.

In a phone interview, Ryan Vance, vice president of programming and production at Revision3, said, “Any situation that creates a tiered structure where large companies with deep pockets can edge out startups is a bad thing for media in general.” As a result, Vance said the folks at Revision3 are firm believers in net neutrality and allowing free access to all content equally.

Erick Hachenburg, CEO of Metacafe, said via phone that the online video industry is full of small and innovative companies that don’t have access to the funds needed to compete with Google’s deep pockets. In fact, he suggested that once upon a time not too long ago, YouTube itself wouldn’t have been able to compete with the likes of Google. Meaning that if Google had once made the type of deal it is rumored to be in talks with Verizon over, YouTube might not have been able to grow into the giant video sharing platform it is today.

Speed matters when it comes to growing an online video audience. “Whenever you think about how to increase usage to a web platform,” Hachenburg said, “the first thing is how quickly you can load your site.” On the one hand, YouTube could argue that improving its speed would be beneficial to its users. But that improved access would come at the expense of all the other web video sites out there.

Revision3, for instance, distributes through YouTube and more than 40 other distribution partners. And while the startup could theoretically see some benefit from having its content prioritized, were YouTube and Verizon to strike a deal, its other distribution partners could see their users migrating to YouTube and other sites that pay for faster load times and better quality streams. All of which could have a “devastating effect” on the web video ecosystem, Vance said.

“At the stage of growth that this industry is at, an even playing field is important,” Vance said. “Content should be able to be seen and viewed and judged on its merits, not on other matters.”

In the same way, Hachenburg argues that Google won’t let companies pay for better search results. So why should Google pay to have its content prioritized? “YouTube might say they’re doing it for the sake of users, but it also happens to be a competitive advantage. But if it is better for users? And who gets to decides the content that they want?” Hachenburg asked.

Related content on GigaOM Pro: The New Net-Neutrality Debate: What’s the Best Way to Discriminate? (subscription required)