SpectatorBytes

YouTube’s recent programming and advertising initiatives are pretty exciting. In them, I can see that YouTube is taking steps to unlock the value of online video.

First, YouTube recently allowed one of its content partners, CBS, to use their own video player to broadcast “March Madness” on YouTube.com. The second was YouTube’s experiment with a more compelling advertising format, dubbed “cross talk,” for the film “The Haunting in Connecticut”.

Both of these initiatives indicate that YouTube is focused on expanding its offering beyond user-generated content to include all forms of video experiences for consumers, as well as growing its ability to offer attractive units to brand advertisers. For me, as an investor and big believer in online video, these are pretty exciting developments.

While YouTube’s roots and success have been built around user-generated content, I believe its lasting legacy will ultimately come from being the catalyst for the growth of the online video industry.

To date, YouTube has captured consumers’ attention when it comes to online video. While new competitors have emerged, streaming statistics show that consumers use YouTube as the starting point for video on the Web. According to Nielsen, YouTube has over ~57% share of total streams viewed on the Web in Feb 2009.

Since YouTube has become the de facto “consumers’ choice”, the online video industry could benefit greatly from using YouTube to distribute their professional content. This would happen if YouTube help content producers to both promote and monetize their content. Given that advertisers are focusing their spending on professional content, helping content producers and content networks scale viewership can prove highly beneficial for both YouTube and them.

This has made me think about what else YouTube can do to become an even better home for professional producers (of both short and long-form content). Here is my dream list of initiatives:

1. Enable integration of third-party video players for all of your content partners. While YouTube may not allow just any and all video players, it could authorize the use of a handful of popular players to expand your content universe. This would allow content producers to more easily manage their content, refresh their promos / interstitials, update recommended playlists and integrate their own ad server solution. Alternatively, YouTube could offer producer content players which enables several of these capabilities.

2. Make YouTube a more attractive platform for content owners to offer long-form content/full-length TV episodes. This initiative requires specific promotion of long-form programming on the homepage to let your users know that YouTube is also a place to see full episodes of TV shows or feature films. It would also entail that content owners retain full control over the monetization of their content. This does not mean that they would not agree to let YouTube help them monetize their content; YouTube would of course be compensated for such assistance. I believe YouTube has put already put a program like this in place for some of its partners today.

3. Build out a premium video sales organization focused mainly on selling professional, branded video content. YouTube can use its scale to persuade advertising agencies to spend greater amounts on online video campaigns. Many emerging content producers will likely need a partner to supplement their direct sales efforts. This may require allowing brand advertisers to use formats they favor for professional content such as pre-rolls.

4. Create a formal programming function (incorporating both systems capabilities and human editors) to help promote professional content on the service. This function will establish policies and processes to work with producers to promote their content. This editorial-driven area of the service can be described as such to avoid having a negative impact on consumers.

5. YouTube can also help spur he growth of digital sales of professional online video. YouTube’s pilot efforts in this area are pretty encouraging. If you provide generous economics, you could use this initiative as a way to attract content partners to work closely with YouTube in all of the initiatives described above. Content partners would like to have multiple outlets to sell downloads, especially through outlets that can give their content exposure to a large audience like YouTube.

6. Deploy technology that allows content companies to use clips of copyrighted content uploaded by users to promote the full-length experience on YouTube. MySpace is collaborating with a startup called Auditude on an initiative along these lines.

Many producers may not be willing to use your platform to distribute their content for fear of giving YouTube too much power. However, creating the right conditions may persuade several of them to build a lasting partnership with YouTube.

Further expanding into professional content (and long-form in particular) presents meaningful challenges for YouTube. Making long-form content a core part of its offering without negatively impacting the user experience is certainly difficult to balance.

The recent events I mentioned at the beginning of this piece lead me to believe that YouTube is heading in this direction already. I recognize this is not an easy task and that I may not have the complete context. Yet, I thought it would be helpful to share my dream list of initiatives for YouTube. Again, I applaud YouTube’s efforts.

It would be good hear about other intiatives that I may have missed.

Update: YouTube is expected to redesign its homepage to showcase premium content more clearly.