YouTube officially received its first Primetime Engineering Emmy Award on Wednesday night.
Yes, it's a signal of the thawing of enmity between the entertainment industry and YouTube, which streams an astonishing 6 billion-plus hours of video each month. But TV networks and studios still have plenty of concerns about how YouTube and Google have altered the way video is distributed and consumed, believing that the Internet giant should do more to fight piracy, for example.
"Since YouTube's founding in 2005, the world is surprised on a daily basis by the creativity, inspiration and passion that the planet's most creative people bring to the YouTube platform," the Academy said in announcing the award. The website's technical innovations "have fundamentally changed the way an entire generation thinks of and experiences television."
That's a far cry from the lawsuit Viacom lobbed at YouTube in 2007, alleging massive and intentional copyright infringement in seeking upwards of $1 billion in damages -- though the Emmy Award also references YouTube's Content ID system for flagging copyrighted material, which the video site created in response to Viacom's lawsuit and other legal threats from content owners.
In fact, Content ID shows how the company has evolved to work in partnership with movie studios, TV nets and music labels. The system lets 4,000 content partners either block uploaded material that they own or let it remain on the service to generate advertising dollars.
"Initially there was uncertainty and tension (with entertainment companies) about, 'Hey, this is a new business model and distribution platform,'" said Jason Gaedtke, the engineering director at YouTube. "But I think Content ID is a great example of a win-win-win. It benefits content owners; it benefits us to keep high-value content on the platform; and it benefits consumers."
Google acquired YouTube for $1.7 billion in 2006, before YouTube had established any kind of business model. Now, the video site generates billions of dollars in ad revenue, and is on track to pull in as much as $5 billion this year, according to RBC Capital Markets.
But with 100 hours of content uploaded to YouTube every minute, sometimes things fall through the cracks. Hundreds of pirated feature films from studios including Disney and Sony cropped up on the site earlier this year before they could be ID'd and removed. Privately, entertainment companies complain that policing YouTube -- while it's continuously working to improve Content ID as well as its content delivery network infrastructure -- requires significant resources.
But content creators also have another business concern: Some say YouTube takes an unfairly big 45% cut of advertising revenue -- terms it has the leverage to ask for given its immense audience. Given that split, however, several YouTube partners say it's difficult to make money.
Meanwhile, TV nets and studios continue to gripe that Google's search engine provides a major way for consumers to access pirated content. The MPAA singled out Google in a study released last month that purported to show the "critical role" it plays in introducing users to infringing movies and TV shows, even if those users are not looking for such content.
Google has said it combats piracy in numerous ways, including with the Content ID system, which Gaedtke estimated has paid out "hundreds of millions of dollars" to entertainment firms.
Despite the concerns, content companies on YouTube have attracted interest from traditional media firms, including Time Warner, an investor in Maker Studios; Comcast, which has backed Fullscreen; DreamWorks Animation, which acquired AwesomenessTV; and Discovery Communications, which last year bought Revision3.
YouTube's 1 billion-plus monthly unique users make it impossible to ignore. And while it's being feted by the Television Academy, that doesn't mean the industry at large is thrilled with YouTube's ongoing dominance of Internet video.