Ever since the emergence of online video on the internet, the new medium has presented a major challenge to the profit models of traditional television broadcasters and cable service providers. As the networks and cable providers were used to the idea of controlling the time and venue of broadcasts (requiring you to sit down on your couch at a certain time to see your favorite show), it has taken them awhile to begin to see some of the inherent advantages of digital distribution of video content. Now, belatedly, video content providers are beginning to realize just how valuable digital distribution can be for their product. But is it too late?

The real issue behind the recent announcement of News Corp and NBC’s decision to create their own video site to challenge Google’s YouTube is the future of video content distribution. We are seeing the end of the network schedule. Consumers will no longer be willing to watch the shows they want to watch when the network wants them to watch them. This much is pretty well accepted, and between video on demand, DVR and Apple’s recently released Apple TV, it is clear that the way that people watch television is changing rapidly.

As it is, YouTube is the premier video website out there. It is as a result of this popularity that YouTube finds itself hosting all of these proprietary videos that are (illegally) uploaded by users. Google, citing the Digital Millennium Copyright Act’s Safe Harbor provision, says that it is not liable for copyright violations posted by its users, so long as it promptly removes them when requested to by the rights holder. Frankly I am not sure whether the networks should be creating such a scene over these copyright infringements, as YouTube has proven itself to be a very useful tool in promotions of television programming. Generally speaking, networks WANT their users to be more involved with their products, and few statistics can speak to the popularity of Viacom’s programming than the fact that their content has been viewed 1.5 billion times on YouTube, as they allege in their lawsuit. Certainly they will say that those viewings represent 1.5 billion missed advertising opportunities, however it is not clear that the people who watch a Daily Show clip on YouTube would necessarily watch the program on television. As with the controversy surrounding pirated music, it is not always true that a download represents a sale lost, but it is always true that a download represents an impression gained.

The fact is that many, if not most, of the people watching The Colbert Report on YouTube would happily watch it on a Viacom-backed alternative. The problem is simply that that Viacom alternative does not exist. Sure, Comedy Central (and other Viacom properties) do offer selected video clips on their sites – indeed, they were one of the first of the major broadcasters to provide this kind of service – but the message that is being clearly sent by users who post copyrighted clips on YouTube is that they want to choose which clips they can see. If Viacom had been providing comprehensive video clips of their programming on their website from the get-go, then I see no reason why users would feel compelled to upload the same clips to YouTube or any other online video site. Instead, by telling consumers what they want, Viacom is driving their own loyal viewers to infringe on Viacom’s copyright by uploading the clips that they actually want to see.

Ultimately, judging from this newfound desire to defy YouTube by the major content providers, we may find YouTube returning to its roots – hosting amateur and independent video. Although I suspect that Google would like to get into the content-brokering business (and it has tied up with a number of serious rights-holders), it could be that YouTube and the major broadcasters decide to go separate ways, with the broadcasters providing their own clips and shows on a proprietary site while YouTube continues to grow in the amateur space.

What will be really interesting to see is if, given the widespread choice of videos by amateur and independent content creators on YouTube, consumers begin to spurn the major studios who fought so hard to separate their expensive content from the riff-raff, effectively walling themselves off from the vibrant marketplace contained there.