I spent the week with my family and also meeting about web video.

Jon Labes and his team at Plentitube, Ian Sigalow – Greycroft, James Altucher and TheStreet.tv, Aaron Task and Henry Blodget on Tech Ticker, Fred Wilson and Bijan Sabet, Steve from Magnify and dinner with Herb Scannell (Next New Networks). I was also pitched a few web video projects.

While all this went on the head of YouTube’s ‘Monetization’ quit for a start-up …(like YouTube isn’t)

My buddy John Labes has the great post this week summarizing how I have always felt and preached since I created Wallstrip :

You made it… so now what?

You rock.

You teach.

You cover the stories big media can’t.

YouTube you blip you veoh you viddler you mogulus you yahoo but still…

You don’t make a profit.

YouTube may have introduced the Partnership Reward program earlier than they were able to pay legit figures to successful content creators. The expectations of both professionals and amateurs alike are guaranteed to be higher than banking a whopping couple hundred bucks for garnering millions of views with their work. I mean come on, it’s not like you’re Google or anything…

The thing that kills me is how obvious it is that more significant advertising revenue is on the way. YouTube just introduced the first in-video advertisement a few months ago. So clearly, if we’re at a nascent stage in the delivery of ads in YouTube videos, why would they rush out and promise the top users revenue when they knew there would be more significant profit for their users just around the corner?

I’m certainly not saying I know any better. Listen, they’re Google. Most likely any one employee of theirs is much more educated in the business of this decision than I am. I’m sure there was great analysis into pricing that would promote retention.

But the marginal impact of the YouTube producer rewards program not only seems to be turning off professional content creators but also adding fuel to the general skepticism about creating a viable solution for those professionals to monetize their work on the internet.

However patience, as in all situations, is key.

Sure the CPMs will rise naturally and everyone will be a little happier — YouTube is probably correct to assume that a majority of “partners” will stay.

More likely, however, is that at some point in the evolution of the internet, someone is going to come along and connect all the tools and services and portals and platforms and players and hosts and when combined, all these great pieces of infrastructure created by very smart and dedicated people will come together in unison and actually start to pique the interest of a professional content creator who informs, investigates, or entertains.

It is still early days in both the making, distributing and monetizing of video content. The first big content shakeout is underway and the next book will come from even cheaper equipment, better distribution and syndication tools and greater knowledge by the creators themselves.

YouTube will have to do a much better job of rewarding the best on their network, not $300 for millions of views…

Lot’s to do and many winners in front of us.