They aren't talking about the random personal clips, specific humor videos, or extracts from TV that still form a major part of sites like YouTube, but semi-professional stuff that people put out there as actual shows; with story arcs, character development and all that stuff...
I hadn't watched enough of these to form an opinion one way or the other. YouTube/Google's strong belief in the existence of the Torso is pretty clear. The proposition is that the underlying economics of creating content have changed in such a way (cheaper to make videos, the Internet democratizes the distribution process etc. etc.) that compelling content that needs to appeal to a smaller set of audiences can now be created. The producers have the tool to make this content (for the record: I think this word is over-used and mis-used, but that's all I have now), the consumers have the means to find and consume this content, and a large new mid-tier market exists for video entertainment and information, and catering to this vibrant market will revolutionize video entertainment forever...and ever; that's the idea anyway. :)
So, I decided to take part of this weekend of figure out how I felt about "web video shows." Yes, I managed to convince myself that this was somewhat constructive and not just me goofing off.:) I ended up watching Quarterlife all the way through, re-acquainted myself with Lonelygirl15, and saw the first 6 2-minute episodes of the much-publicized, Michael Eisner-promoted Prom Queen.; and well: I'm a believer.
Quarterlife especially, which NBC picked up, really worked for me. It is a little pretentious, but if I was a few years younger I wouldn't have thought so. Prom Queen too moved quickly, and I was really impressed that it did do enough in terms of keeping me intrigued for the 2-minute play time to make me keep clicking on the next button to queue up the next video. I compared it to how I feel about watching TV shows online, and its very, very comparable.
Now that I think about it, I'm surprised I ever doubted the viability of this idea anyway. I mean we've seen this before time and time again. The closest most obvious example: Indie movies which no one really questions the economics of anymore. They're cheaper (and it often shows), appeal to niche audiences and are hence harder to find: sound familiar?
And the makers of these web video shows are adopting standard media tactics again, in terms of using time to differentiate between distribution platforms and changing the product a little bit around the way to try to monetize it. Take "Prom Queen" for example: shows up on Myspace (show is reasonably tied-in with Myspace), and the Prom Queen site first, and then after a delay gets posted on YouTube.
The good news is that they're fine with hitting multiple distribution platforms (their site, YouTube etc.), and unlike Big Media aren't trying to use the content to draw all users to their site or nothing at all.