• by Gavin O'Malley  @mp_gavin, June 5, 2007

No longer just a venue for wedding-cake bloopers, YouTube has struck a distribution deal with Hearst-Argyle Television Inc., one of the largest owner-operators of local TV stations. Hearst-Argyle will provide YouTube with local news, weather and entertainment video per a confidential revenue-sharing agreement.

The move could mean big bucks for Hearst-Argyle, which becomes the first local TV station group to profit whenever its content is streamed on any video-sharing site, let alone YouTube. (On the national front, YouTube has long carried NBC content, and in March worked with CBS to create an NCAA college basketball channel.)

Only a small segment of the hundreds of millions of videos streamed on YouTube each day now consist of amateur video snippets. Other popular categories include musical videos and live performances, elaborately produced video blogs, remarkable news and sports clips, and even network content not flagged for copyright violations.

For that reason, some analysts see no reason why local news coverage wouldn't be a natural extension for the top video-sharing hub.

"People go to YouTube for video--period," said Kevin Heisler, an analyst with Jupiter Research. "It's become this giant aggregator of all things video, not just a comedy site, or news site, or a video blog site."

On Monday, five of Hearst-Argyle's top stations--including WCVB in Boston and KCRA in Sacramento, CA--began posting local video content to designated YouTube channels. More are expected to follow.

The deal comes at a time when TV programmers are waking up to the power of online video syndication--a trail being blazed by CBS, which recently established a broad Internet distribution platform for its programming through deals with 10 major companies, including AOL, Joost, Comcast, MSN, and Brightcove.

"The big choice [media companies] are making is video syndication," said Heisler. "They're finding that this is the most effective way to get their content seen."

Local TV stations have been particularly slow to take advantage of the recent surge in online ad dollars--taking in a mere $32 million in online video ad revenue last year, according to Borrell Associates. By contrast, newspapers made $81 million on the sale of video ads online last year.

Hearst-Argyle owns 26 television stations and represents ABC's largest affiliate group. Its station Web sites streamed 38 million videos last year, up 29% from 2005.