Today Google purchases YouTube for $1.65 billion! See what founders Steve Chen and Chad Hurley have to say about it:

www.youtube.com

Steve Chen, 27 and Chad Hurley, 29, began YouTube in 2005. Both were among the first 20 employees hired for Papypal in 1999. Hurley is a designer from Indiana University of Pennsylvania, while Chen is a computer science graduate from the University of Illinois at Urbana-Champaign. Chen began working at Paypal during his senior year in college.

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There can only be so many inane commericals packed into a minute before the audience rebels. But a rebel without recourse is a bit fruitless. All that is changing.

In a recent article in Forbes, it was reported that 83% of people intending to purchase digital video recorders are doing it to skip commercials.

www.forbes.com

Add to that, the cost of bandwidth is decreasing at about 30% per year. TVover reported the other day:

“More than 106.5 million people, or about 3 out of every 5 U.S. Internet users, streamed or downloaded video during the month of July [2006]. In total, nearly 7.2 billion videos were streamed or downloaded by U.S. Internet users for an average of 67 streams per streamer, which means the typical video streamer viewed an average of more than two streams per day.”

www.tvover.net

Combine rebellion with recourse and the options get more interesting. With television watching declining and internet use rising, consumer generated media gives story telling a new kind of kinetics.

Case in point, the success of YouTube. Started in 2005, it is now a 60 programmer business run by former Paypal employee, Steve Chen.

Who doesn’t 100% hate being forced to watch insipid, brain petrifying TV commericials in conjunction with second-rate storyline TV programs that simply don’t engage. Along comes cost decreases in camcorders and streaming media combined with increasingly easy to use tools like iMovie, iLife, and digitization. Now this is what fun is. Stupid TV commericals, move over, making our own consumer generated content has become The Entertainment King.

Another fascinating part is how the YouTube, MySpace, FaceBook business model is unfolding. When MySpace was swiped out from under Viacom’s feet by Murdoch’s News Corp. for $580 million, suddenly a couple of young entrepreneurs got dirt rich.

Everything’s been free on YouTube, leaving the puzzle - where’s the revenue going to come from? Will YouTube make its bundle on the auction block, or through paid ads, or neither?

I’m staying tuned, this is way more involving than television.