YouTube, a leading site for watching video on the web, won new funding yesterday, as a research firm predicted demand for internet video services was about to explode.

YouTube, which has grown popular by hosting video clips uploaded by its users, said it had received $8m in second-round funding from Sequoia Capital, a venture capital group that backed Yahoo and Google. "This is the birth of a new clip culture where the audience is in control more than ever," said Chad Hurley, chief executive.

"YouTube is at the forefront of a cultural shift in digital media entertainment and media distribution," added Roelof Botha, a Sequioa partner.

IDC, the research firm, said yesterday that internet video services were on the brink of becoming a mainstream phenomenon in the US and were primed for explosive growth.

IDC said in a study that the market would grow from around $200m in 2005 to more than $1.7bn by 2010.

YouTube reports more than 35m videos are watched daily on its site by 6m unique users, with tens of thousands of clips uploaded every day.

"It's been growing by word of mouth but it needs to work on an advertising business model," said Josh Martin, author of the IDC report.

"It is complying with content owners notifying it of copyrighted content [being unlawfully uploaded] and taking it down, so it's probably not going to be shut down for that."

YouTube was founded in February last year and won $3.5m in first-round funding from Sequoia in November. It plans to use the new funds to expand sales and marketing and build out its infrastructure.