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.