EARLIER:
One new twist in the Cablevision-News Corp. fight: News Corp. has cut off Cablevision subscribers’ access to its shows on Hulu, the video site joint venture, as well as on its own Fox.com.

Here’s a screenshot from Fortune.com columnist Seth Weintraub, taken this afternoon when he tried to watch a Fox show on the site, which is co-owned by News Corp., Disney’s ABC and GE’s NBC Universal:

News Corp.’s comment, via Fox Networks PR guy Scott Grogin: “Fox.com and Fox content on hulu is unavailable to Cablevision subscribers.”

And here’s Hulu PR rep Elisa Schreiber:

Unfortunately, we were put in a position of needing to block Fox content on Hulu in order to remain neutral during contract negotiations between Fox and Cablevision. This only includes Fox content. All other Hulu content is accessible to Cablevision internet subscribers. We regret the impact on Cablevision customers and look forward to returning Fox content to those users as soon as possible.

This is an important escalation from News Corp. (which owns this Web site) in its fight to extract more dollars from its cable partners.

In the past, cable subscribers who couldn’t get Fox shows during fee disputes were still able to watch some of them via Hulu. I know that News Corp. has discussed shutting off access to the site during past fee fights, but as far as I know this is the first time they’ve actually done it.

It’s also a logical move, at least from News Corp.’s perspective.

If it’s trying to increase the pain felt by Cablevision and its subscribers, it may as well use every tool it has. And in the past, the Web has been used against programmers like Fox in these fights: Last year, when Time Warner Cable was fighting with News Corp., it prepared a video showing customers how to find their favorite shows on sites like Hulu.

But while the move is certain to rile up the digerati (astonished industry executive to me, over the phone, just now: “That is crazy!) I’m not sure how much real impact it will have in the fight.

News Corp.’s most valuable weapon is access to the Phillies-Giants playoff game tonight, and the New York Giants-Detroit Lions game tomorrow.

Both are scheduled to air on Fox, and many of Cablevision’s three million subscribers who live in the New York area will holler loudly if they can’t see them. But they wouldn’t be able to see them on Hulu or Fox.com, anyway.

Instead, those sites are used to show reruns of Fox broadcast shows. That means Cablevision subs can’t see Sunday night’s episode of “The Simpsons” on Monday, but that’s not the same kind of impact.

It has fixed its tech problems and is doing just fine, thank you very much. Vevo says it is generating around 20 million video views a day, which puts it on track to generate some 600 million views a month.

Some context: ComScore (SCOR) says that Hulu itself generates some 900,000 video views in the U.S, making it the second biggest video site after YouTube. And Viacom (VIA), the current No. 3, generates 500,000 views.

If you want to compare apples to apples, though, you have to cut Vevo’s 600 million down to 300 million since about half its views come from outside the U.S. Still, that’s enough to qualify Vevo for eighth place in comScore’s rankings, placing it above AOL (AOL) and CBS (CBS).

And when comScore’s December video numbers are released at the end of this month, Vevo’s numbers will come in below 300 million since it didn’t launch until Dec. 9 and because comScore’s numbers are usually lower than any site’s internal numbers.

Still, that’s a lot of eyeballs, and it’s more than the joint venture between Sony (SNE), Vivendi’s Universal Music Group and Abu Dhabi Media Company expected. But the fact that Vevo began with a huge audience, rocky start and all, shouldn’t be a surprise.

In fact, I said so last month. No need to type it twice:

While everyone has rightly been flocking to Vevo.com itself for a look-see, it’s not the most important Web site for the joint venture. That would be YouTube, where most Vevo users are actually going to encounter–and watch–Vevo videos, without even knowing that they’re watching a Vevo video.

To be clear: When Google’s (GOOG) video site agreed to help Universal Music Group (and later Sony) launch a new hub for music videos, it didn’t mean it would be sending its users away from YouTube.

When you read about Vevo launching with 400 million video views in the first month, understand that the majority of those aren’t coming from the new site but from YouTubers who are watching music clips the same way they always do, on YouTube. But Vevo will get credit for those eyeballs and any ad dollars they generate.

That is: If you’re watching a Ke$ha video on YouTube, there’s a good chance you’re watching a Vevo video.

So. Next question. Can Vevo turn all those views into dollars?

We’ll see. CEO Rio Caraeff tells me his sales group continues to bring in high-profile advertisers–the latest, last week, was Procter & Gamble (PG)–and has been able to get between $25 and $30 for every 1,000 impressions. That’s a whole lot better than videos traditionally earned on YouTube, and as good as some TV shows.

But it’s relatively easy to announce that you’re selling your initial batch of inventory at a high rate. It’s much harder to sustain that over time. So it’s hard to read too much into those numbers just yet.

In the meantime, the site is going to get much bigger in the near future.

For one thing, it should start showing videos from EMI Music Group within a few weeks, which means that it will have clips from three of the four big music labels. Warner Music Group (WMG), the lone holdout, has its own deal with YouTube.

And in March, Vevo should start syndicating its clips to other big properties, starting with CBS and AOL, meaning it will have plenty more eyeballs to sell. The challenge will be proving that the JV’s thesis–music videos alone are attractive to advertisers–is worth the effort.

Meanwhile, here’s a primer on Ke$ha, whom I didn’t know about until the other day. She is apparently big with the kids these days.

Gawker’s Doree Shafrir explains this to the rest of us. And if you don’t like words, here’s the clip:

Here’s the latest, currently running on YouTube’s homepage. (Don’t worry–it’s not your computer–this one’s mute):

While we’re doling out praise, let’s also single out Google’s (GOOG) video site, which has done some very clever–and appropriate–stuff with its real estate. This one’s a classic:

Granted, it’s easier for a site like YouTube, which draws an audience that wants to be entertained, to muck around with its site design than it is for, say, a newspaper. (That said, both The Wall Street Journal and the New York Times, among others, have handed over front-page real estate to Apple). Even so, while YouTube is still trying to figure out the best way to sell ads on its videos themselves, it has turned its front page into a lucrative opportunity.

YouTube is rolling out the option today, via its TestTube collection of beta trials. The idea is straightforward: Make the site work better for people who lack high-powered PCs or robust broadband.

Feather users get the same clips, but with fewer options; Feather doesn’t appear to offer the “high-quality” large-screen option, for instance, and many commenting and sharing options have been removed or stripped down.

But if you’re just interested in watching YouTube, none of that is going to matter to you, and you may very well not notice the difference anyway. I might try it whenever I have to use my slow and unreliable Sprint (S) wireless modem.

I don’t think you’ll be able to tell the difference by watching this embedded clip–pretty sure you have to opt-in to the beta for this to work–but worst-case, you get to see Tom Cruise and Jack Nicholson chew up the furniture for the umpteenth time.

“Eventually we’d like to make money out of it.”

– Google CEO Eric Schmidt on YouTube

It’s been well over two years since the $1.65 billion acquisition and Google has yet to truly monetize YouTube. And while the company persists in claiming it has the “luxury of time” to develop the business model through which it will recoup its investment in the popular video site, it’s clear that time is running out. To wit, a report this week from Credit Suisse that predicts YouTube will earn $240 million in revenue in 2009. Which wouldn’t be half bad were it not for the fact that YouTube is on track to lose $470 million in 2009. The research house figures YouTube will rack up about $711 million in operating expenses this year–$360 million on bandwidth alone.

An unfortunate disparity, that. Is it one that can be corrected? Credit Suisse seems to think so. “In our view, the issue for YouTube going forward is to increase the percentage of its videos that can be monetized (likely through more deals with content companies) and to drive more advertiser demand through standardization of ad formats and improved ad effectiveness,” it explained in a research note. Of course, this is exactly what YouTube is doing. On Monday the company said it has agreed to an ad revenue-sharing partnership with Disney (DIS) that will see it putting ABC and ESPN videos on YouTube. A small first step, but one that could portend a trend. Especially, if as Google (GOOG) CEO Eric Schmidt says, the company hopes to eventually make money out of it.

For YouTube, which has been struggling to monetize the 330 million visitors coming its way each month, this may be the beginning of the business model that has so far eluded it. That said, the company is going to have to offer those visitors a bit more than grainy “MacGyver” reruns if it hopes to prevent them from turning to Hulu for premium long-form video content.

For YouTube, which has been struggling to monetize the 330 million visitors coming its way each month, this may be the beginning of the business model that has so far eluded it. That said, the company is going to have to offer those visitors a bit more than grainy “MacGyver” reruns if it hopes to prevent them from turning to Hulu for premium long-form video content.

Eventually we’d like to make money out of it.”

Google CEO Eric Schmidt on YouTube

It’s been two years since the $1.65 billion acquisition and Google (GOOG) has yet to truly monetize YouTube. And while Google CEO Eric Schmidt insists the company has the “luxury of time” as it searches for ways to recoup its investment in the popular video site, it’s clear the issue is gradually becoming more pressing. “We’re waiting for the innovations,” Schmidt said recently. “The innovation will come. We know it will come. We know it’s there.”

Could the “it” to which Schmidt refers be the new e-commerce platform YouTube is launching? Perhaps. Beginning this week, YouTube is embedding “click-to-buy” links in certain videos on its site, which refer users to affiliate services selling the music featured in them. “Click-to-buy links are non-obtrusive retail links, placed on the watch page beneath the video with the other community features,” YouTube explained in a post to the Official Google Blog. “Just as YouTube users can share, favorite, comment on, and respond to videos quickly and easily, now users can click-to-buy products–like songs and video games–related to the content they’re watching on the site.”

An interesting idea. And should it prove successful, it could begin to justify YouTube’s jaw-dropping $1.65 billion purchase price. “This is just the beginning of building a broad, viable e-commerce platform for users and partners on YouTube,” the company explained. “Our vision is to help partners across all industries–from music, to film, to print, to TV–offer useful and relevant products to a large, yet targeted, audience, and generate additional revenue from their content on YouTube beyond the advertising we serve against their videos. And those partners who use our content identification and management system can also enable these links on user-generated content, by using Content ID to claim videos and choose to leave them up on the site.”

Eventually we’d like to make money out of it.”

Google CEO Eric Schmidt on YouTube

It’s been two years since the $1.65 billion acquisition and Google (GOOG) has yet to truly monetize YouTube. And while Google CEO Eric Schmidt insists the company has the “luxury of time” as it searches for ways to recoup its investment in the popular video site, it’s clear the issue is gradually becoming more pressing. “We’re waiting for the innovations,” Schmidt said recently. “The innovation will come. We know it will come. We know it’s there.”

Could the “it” to which Schmidt refers be the new e-commerce platform YouTube is launching? Perhaps. Beginning this week, YouTube is embedding “click-to-buy” links in certain videos on its site, which refer users to affiliate services selling the music featured in them. “Click-to-buy links are non-obtrusive retail links, placed on the watch page beneath the video with the other community features,” YouTube explained in a post to the Official Google Blog. “Just as YouTube users can share, favorite, comment on, and respond to videos quickly and easily, now users can click-to-buy products–like songs and video games–related to the content they’re watching on the site.”

An interesting idea. And should it prove successful, it could begin to justify YouTube’s jaw-dropping $1.65 billion purchase price. “This is just the beginning of building a broad, viable e-commerce platform for users and partners on YouTube,” the company explained. “Our vision is to help partners across all industries–from music, to film, to print, to TV–offer useful and relevant products to a large, yet targeted, audience, and generate additional revenue from their content on YouTube beyond the advertising we serve against their videos. And those partners who use our content identification and management system can also enable these links on user-generated content, by using Content ID to claim videos and choose to leave them up on the site.”