This week we’ve seen a few articles about some of the revenues being generated by Google’s streaming video giant YouTube as well as the revenues earned by specific, popular YouTube video creators. This is a far cry from years ago when YouTube was notoriously unprofitable and analysts around the world wondered if Google’s $1.65 Billion investment had gone to waste. Well, with reports that YouTube is on track to earn $450 million, according to the New York Times, we may be on the verge of seeing a market change not unlike the social games explosion of 2009.

I remember in late 2008 and early 2009, when gaming pundits around the world collectively scoffed at the idea of these up and coming “mafia” and “text-based” games. Experts understood they were gaining players quickly, but they estimated those players were only barely engaged to the non-fun games and that there certainly wasn’t a monetization opportunity since all the games were going out for free. This closed minded attitude allowed swift independent developers to apply their creativity and look East towards the land of virtual currencies. By applying intelligent virtual goods and virtual currency systems to games like Mafia Wars, Pet Society and then finally, FarmVille, game developers made their mark, and the rest is history.

So how will video echo some of the success and growth of the social games industry? I take a look below.

1) Premium Content and Virtual Currency

Just as people were dismissive of virtual items or subscriptions in social games, and therefore ruled no money was to be made, people make similar mistakes when analyzing video. When I say that video could make money through premium content, people immediately counter that “nobody will pay for an amateur video of cats”, as if that’s the only way to offer premium content. What if there was a meta-game surrounding the video, and players could watch videos and buy badges or virtual goods related to their favorite videos? That may incent a small number of players to pay a small amount to video makers, but since the number of video impressions per day is astronomical (YouTube has over 2 Billion video views per day), this could be the crack in the dam that allows the first virtual currency revenue to start pouring in for video makers.

2) Increased Advertising Opportunities

As Megan reported this week, YouTube is rapidly accelerating their advertising revenue for web video. They are now serving 2 Billion video ads per week, and those ads are attracting an increasing number of clicks. The formats are also expanding, with branded channels, video pre-roll ads, layover advertisements, banners and more. Major networks, for instance, are now allowing copyright content to be posted on YouTube and putting their own advertisements on the clips, and collecting the revenue. This makes the entire world of YouTube a giant advertising opportunity for their shows, and in fact, a new revenue source.

3) New Forms Of Video

People tend to think that web video and viral video will only take its one, standard form, but we’re seeing evidence of more and more interactive YouTube videos and YouTube based games. These ideas have tremendous potential for monetization. Imagine a choose your own adventure horror game that costs 5 Facebook Credits to play? Something like that would be the modern day equivalent of an arcade game, but in the space of your own house. 5 Credits is 50 cents, so it’d be easily worth it for one joker to play with all his friends during the midnight hour at a slumber party. This kind of experience lends itself well to a service like YouTube.