A YouTube Monetization Model that Does Nothing for YouTube

(MoneyWatch)  Want to get a good bead on how complicated YouTube's monetization issues are? Then read this story at Mediaweek about YouTube sending out notices to popular content providers on the service who have been doing their own branding integration deals without YouTube's authorization (and without giving any revenue to YouTube).

The clip above is an example. From a provider called slotcarTV, it's a spoof of Nascar, with a very heavy presence from fast food chain Hardee's. Another content provider, who goes by the name Mr. Safety, told Mediaweek he hasn't been contacted by YouTube, but, interestingly, he has also agreed to have ads embedded in his videos (see frame with Jonas Brothers ad at right). In other words, if you make YouTube some money, the site may look the other way.

It's not appropriate (in fact, it's against YouTube's terms of service), for content providers to cut their own integration deals, but you have to wonder if one reason they're doing this is because YouTube has been so slow on the monetization front. Rather than sending out letters, YouTube might consider letting its more popular providers cut all the integration deals they want, as long as YouTube gets a cut -- it would be creating a whole new sales force with the scale to make a difference to YouTube's bottom line. Better yet, YouTube could serve as a conduit between advertisers and YouTube's more popular online stars, helping those stars cash in on their YouTube fame. Fortunately, it sounds as though YouTube is getting religion. It's soon to announce what the story said will be "a new formalized process for branded integration videos."