In our case, we never blocked those video sites and all the other social networking sites for that matter. We did this before but it never really helped.
What we did was we just implemented a 'strict' computer and internet usage policy at work. By strict, it means that we constantly monitor them by using a complete time tracking software that records the time they use the computer including the sites they visit and the activities they do. This actually increased our productivity all the more.
The important thing to note is that the implementation of the policy has to be clear enough that everyone will understand it. After all, we all don't really want a lot of work time to go to waste. According to this article, a 2010 Salary.com survey indicates that on average, around 64% of workers waste one hour or less each day at work, while 14% waste 3 or more hours each workday. I think in a way we were already able to minimize this.
