Do you guys completely ignore the facts while pontificating about strategy and the future?
Google already had Google Video to use as a "strategy lab". They had a reasonable size audience and it is growing over time. It was certainly large enough to test any theories and collect user behavior.
Google bought YouTube for the buzz and distribution. They already had the technology and a great brand name.
They ended up buying a lawsuit, and several more to follow. This will end up being a multi-billion dollar mistake.
BTW, have you ever done the math on your strategy? I have. I wrote an in depth blog about YouTube traffic, licensing costs, advertising rates, bandwidth costs, and other variables.
The business model doesn't work. The strategy sounds great in theory, but in practice is doesn't work.
To be taken seriously in the business world you need to understand the whole picture; the technology, the strategy, the competition, the legal aspects, and the financial costs and returns. Each one of these areas is incredibly complicated once you dive into it.
Dreaming up hypothetical strategies without a deep understanding of the rest of the picture is pointless chatter. Hey, I like to do that myself in my spare time...but not at work where billions of dollars are at stake.