Sara Pollack addresses briefly what I hope will get a lot more attention in the future. YouTube’s Discovery tools. The most enticing thing to filmmakers that YouTube has to offer is an audience base.

But the reality is that often times amazing videos sit there with only 50 to 200 views. So I’ve been telling YouTube ever since Spencer Cooks in their PR department contacted us a year ago that they need to improve discovery tools on YouTube.

YouTube needs to use your friends and the favorite tool to come up with a pool of videos a user is very likely to enjoy. The idea is that if your real friends liked it then you probably will too. Susan, Brian and I explained to Sara over lunch that then as you rate videos software can learn which friends really have the same taste as you and friends who like things that you dislike can automatically stop influencing the suggestions to you if that continues to occur.

This is kind of like amazon and netflix suggestions but different because it’s based on your friends rather then the entire population on the site. Thats the key thing that very few sites seem to understand just yet. The other thing we always tell youtube when ever we get someone listening to us is that the revenue needs to be higher and we think that can happen with a better user generated advertising echo-sphere.

So instead of banners for products that take you to standard produced commercials, you could have videos made by real people and creative filmmakers that are inspired by a product and make an ad for it and submit that ad to the company. Almost the same way you request friendship from someone and then wait for approval.

The company could then approve the ad if they wanted to and agree to a certain price per view and then any other youtube show could use that video as an advertisement and get revenue for encouraging that ad to be viewed. But more importantlly people would come to the video on their own accord if either it was really creative or if it was really informative. Then the company could also put it on their site and the more the video does it’s job promoting the product the more the person that made it gets paid.

This way advertising on youtube won’t be just for mainstream products but also for smaller more niche products and services. And advertising 101 tells us that targeted niche advertising is more profitable. But of course it’s hard to manage such small business deals unless of course you are google. They run google ad sense so they already know how to manage millions of niche advertisements.

So all in due time I suppose. I’m pretty sure this is where YouTube is headed and when video sharing becomes old news it will be the reason YouTube sticks around. It won’t be the beautiful place it once was but will be a good place to watch ads. But I think we all know a new haven of video discovery and sharing will emerge. My only hope is that it’s using the back bone of an open platform but that also manages to get compensation back to the creators.

Because in the end, for the record, I don’t think that the future of all content creation should be funded by ad revenue. I think it should be subscription services and maybe secondarily ad revenue. The reason why is eventually there will really be no way to interrupt a user even in the most subtle way like a banner popping in as the video plays. All of that stuff will be removed so the content industry shouldn’t create a system where we rely on ad revenue.