News Corp. (NWS-A) and NBC (GE) have done something that YouTube refused to do, and that was create a product that will cater to the advertisers and agencies looking for quality online video for its products and services.
The quickness with which major advertisers like Royal Caribbean and GM responded to calls from the new venture to get involved underscores the hunger for this type of video platform.
The problem from the advertisers point of view is their concern over what their commercials will end up next to if they use sites like YouTube. They know what will happen if their stuff ends up next to raunchy humor, language or sexual clips.
"The idea is to align yourself with high-quality content with the thought that it will have a good rub-off on your brand," said David Cohen, exec VP and U.S. director of digital at Universal McCann, which buys media for Intel, another launch advertiser. "Purchase intent and brand favorability come from association of the 
content with which you align yourself."
This all leads to the question of how or if YouTube will respond. Will they wait to see if the new business really gets traction and takes off? If they do will they lose a huge competitive advantage? Do they change what they are?
Those are the types of questions in the minds of the YouTube team at this point. To me one of the interesting things about this is that YouTube has been touted as a new business model for quite a while. In reality that's not really true. Overall there's really no monetization of significance on the site, so there is no model.
Now with this new venture, this in reality is a new business model. And when I say new, I'm referring to an online model. Obviously advertising around video is simply a way of saying advertising on TV. But for online, this is definitely a first as far as scaling video goes.
As far as the question of how YouTube will respond to this, they don't have too many options. Either they stay the same and the site becomes some type of loss leader and marketing tool for Google, they go the middle road and do deals for professional content with controls in place or they go the route that the new competition is taking.
It seems like they've been paralyzed into inaction by their inability to figure out what to do with what they have; like they're afraid to make a decision. They definitely need to start making decisions and try some different things. To me they've already started to lose a little of their luster as what seems to be YouTube fatique is starting to settle in.
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