Even as Google took charge of the ever growing video sharing market with the announcement of its $1.65 billion acquisition of YouTube this week, Israel's largest cellular provider Cellcom is looking at the trend to boost its image among younger consumers and its third-generation offering.
"We initially focused on music as a driver of 3G content and now we have pin-pointed user generated content as the second major trend that will push the market forward Adi Cohen, VP Marketing and Sales at Cellcom told The Jerusalem Post.
Recognizing the success of YouTube and the presence of Israelis on the site, Cellcom launched its own video-sharing Web site www.heep.co.il in July with the idea of building a community of Israeli users.
While Cohen says its numbers always will be small relative to the likes of YouTube and Google video, he reported that the site has had almost one million unique users since the launch.
"We are receiving around 50,000 hits a day and it is our goal to at least maintain that level and even grow it," he said
YouTube, which was founded in February last year, quickly grew into one of the most popular sites on the net attracting approximately 20 million visitors each month, viewing around 100 million clips daily.
The video sharing concept allows users to post videos they have made to the Web site, giving them immediate access to a worldwide audience. A clip called "hey" posted on YouTube by two Israeli girls has been viewed nearly 10 million times.
The cellular company, however, may not be as bent on counting uploads as its global counterparts and sees "heep" site as a means to gain the upper hand on its competitors Pelephone and Partner Communications.
"We approached the project as a long-term business strategy and came to it from a few different angles," Cohen said.
These, he explained, include using the site as a tool to boost its image among the younger generation and connect with the trends that are influencing them.
"By providing an arena that appeals to the young and suits their needs, the site creates a good image for the company," Cohen said. "It is allowing us to build a community that we can easily keep in touch with."
He added that with most 3G phones today equipped with cameras, the two markets have a natural synergy as there is always an opportunity for users to create content to upload through the phones.
Cohen expects the local 3G market to enter a new faster phase and said Cellcom has been working very hard on its 3G handsets. Currently, the company has six 3G handsets and will introduce another two to its full portfolio of 24 phones in two weeks.
Since Partner launched its 3G service in December 2004, the handsets have had a cautious entrance in Israel, however.
"The jury is still out on 3G and there is still a question of whether it will be a success," said Richard Gussow, an analyst at Excellence Nessuah. "It all depends on whether and when handset prices will come down, which is when the real test to the market will come."
Gussow agreed with Cohen's estimation that 3G sales would pick up in the coming year.
While there are other Israeli video sharing sites such as www.flix.co.il and Partner has launched a somewhat different video blogging product with TV producer Keshet and MSN Israel, Cellcom claims to have set a trend of its own with the launch of "heep."
"We are one of the first cellular service providers in the world to combine user generated content with its cellular capabilities," Cohen said. "I think you will hear of more joint ventures between cellular providers and such Web sites. Everything that is relevant on a Web site can now be supplied on a phone."