Online video sites saw traffic soar by 41% in the month of August. Nielson Online just released figures to prove industry expectations correct.

The month-over-month growth for August was 2.40% and the year-over-year growth was 18.00% for unique web-video users.

Youtube was by far the industry leader, followed by Hulu, Yahoo, MSN/WindowsLive/Bing, and Nickelodeon Kids and Family Network respectively.

Youtube is the largest video website on the internet. Currently, Youtube is in the progress of negotiating a deal with Holly executives from Lionsgate Entertainment, Sony and Warner Brothers to offer full-length movies for rent on its site. Currently Youtube offers its content for free and makes an income from paid advertising–much in the same way as it’s owner does: Google. If negotiations are successful, Youtube would be directly competing against Netflix, Amazon and Apple for the paid, streaming media market.

Youtube is completely a dominant figure in the world of online video. In July of 2009 for example, nearly nine billion video clips were accessed through Youtube in the United States, which is about 10 times the amount of its closest competitor ( reported by ComScore ).