Hollywood's happy relationship with video sharing mega-site YouTube is apparently over, according to a recent Variety article. In the past, studios and networks were happy to use the vast audience YouTube commands to promote their big projects and give their smaller ones a chance at finding an audience. Both YouTube and Hollywood enjoyed this mutually beneficial relationship and both seemed to get something out of it -- Hollywood got free promotion for its product and YouTube's user base increased tremendously.
But like any relationship, this one was not without its share of issues -- especially when copyrighted content started to appear more and more on the site. This soon created a big problem for the studios. "The marketing guys love YouTube and the legal guys hate it," said Ian Schafer, CEO of online advertising company Deep Focus in the article. "Every media company has a party line, but internally it gets crossed more often than not." Still, even with these problems, the studios and YouTube managed to continue their relationship -- at least for awhile.
But now, just about a year later, things have changed in a big way. YouTube has been the recipient of various legal actions compelling it to remove content from the site and threatened with even more legal action. What are the reasons for the change? Well, according to the article, there are two major ones. One is that the site has more visitors than anything the studios have on the web. In fact, only Fox's MySpace site has more traffic. The other reason is one that should come as no surprise to anyone: money. When YouTube sold to Google last fall for a cool $1.7 billion, executives at the major studios had to take more notice.
"One day we woke up and found out this little Web site was sold to Google for over $1 billion and we realized they just built a business off of our content," says one senior TV exec. in the article. With all the furor over YouTube and the legal action taken by studios to have their content removed, it just seems to me like a case of trying to have your cake and eat it too. The studios were happy to use YouTube and its users when the mood and the market suited them. But now that the site is making money and has gotten so huge, the studios cry foul. Its not that hard to believe, as the story is as old as Hollywood itself. One day they love you and the next day, you're all washed up. YouTube, welcome to showbiz.