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MySpace (NWS-A) has been somewhat quietly going about putting together an online video challenge to YouTube (GOOG). It's interesting in that MySpace users were part of the reason for the rapid rise of YouTube in the first place.

On Thursday the company is going to rename their video-sharing service MySpace TV. One thing the newly changed site will do is become independent from MySpace itself so those who aren't members will also be able to watch or share video without having to sign up to do so. That removes a barrier to usage that should make an immediate impact on the number of people uploading and viewing the videos.

Chris DeWolfe, MySpace’s co-founder and chief executive said, “We haven’t really freshened up our video offering since we launched it. We wanted to highlight the fact that we have a video destination on the Web with all this great content that we’ve acquired.”

The content he's talking about is the professional content they've gotten exclusive rights to like the Sony "Minisodes" where they will present five-minute clips of various sitcoms from the 1980s. Since they recently attainted the rights, people have watched them in the tens of thousands.

Their focus on growing their online video market has already started to pay off. As of April, they had 50.2 million people view videos on their site in the U.S., versus 57.9 million on YouTube. MySpace also grew at a quicker pace than YouTube domestically, according to comScore.

With the resources of MySpace, it is surprising that they haven't been more proactive in improving the very basic service they still have, since they've been in the online video space since January of 2006. It also surprising because they are the second most visited video-sharing site online.

“When you go to MySpace video now, what you see is far less appealing to the eye than what you get from other video sites,” said Jeff Berman, a MySpace executive who has been over the MySpace video strategy since March.

Another reason MySpace has to respond in video is because YouTube is starting to add social networking features to their site which could draw people away from them.

One thing that will be similar to YouTube, and which YouTube has had pretty much since its beginning, will be the additional ability for users to put things into categories where they can be gathered for easy access.

Another part of MySpace TV is that it is made to integrate with the social network in a way that it seems to hope will draw users away from YouTube. MySpace members will be able to link to a channel on MySpace TV which will let the user look throught the videos they have uploaded. Users will be able to customize the design in the way they have with their personal profiles.

With the recent acquisition of Flektor, users will also be able to do some mashups and edits on MySpace tV where they can put together different videos to create their own, unique clips.

It seems that this will probably be the vehicle that the announced partnership between Fox and NBC Universal (GE) will use to display their content. They're also going to distribute it through AOL (TWX), Yahoo (YHOO) and Microsoft (MSFT).

The big story in online video recently has been the focus on professionally produced content. MySpace is definitely looking in that direction primarily, so it's not trying to copy YouTube in that way - and they wouldn't want to as far as monetizing the content goes. Most advertisers don't have much interest in putting their products alongside or within amateur video.
 
With the strong demand for professional content emerging, MySpace does have an advantage as copyright owners and potential content creators know they're much more commited to providing a protected environment for videomakers.

Monetization will follow professional content as far as online video goes, and the strength of MySpace with its protection and filters puts them in a strong place to move forward in this area.