Just like in the interactive zombie film The Outbreak, you keep running from the creatures, and just when you think you’ve found a new sanctuary, they sniff you out and keep coming and coming and coming…

The creatures I’m talking about here are Hollywood stars and studios, and the “you” is the independent movie producer or fan looking for a place to call their own…

"Hope this film scores at Sundance. I could use a break..."

Look at the Sundance Film Festival, which began in 1978 as a showcase for independent films. While it’s still the Super Bowl for indies hoping to get discovered, it’s now as commercialized as the Super Bowl, with giant corporate sponsors placing products in every nook, and Hollywood bigwigs booking all the best rooms and restaurants months in advance. The indies still get some spotlight, but they’re now sharing it with the likes of Richard Gere, Ethan Hawke and Don Cheadle — hmm, where have I heard those names before? — whose film Brooklyn’s Finest was one of the many star-studded flicks that premiered at this year’s Sundance.

Sundance: Owned.
Next up? YouTube.

Today’s L.A. Times reported that major talent agency William Morris is negotiating a deal to feature its talent on YouTube. So move over X-Rated Abigail, Dance Evolution dude, and pillow fighting French Maids — you might find yourself sharing YouTube’s bandwidth with such William Morris clients as Russell Crowe, Denzel Washington, Emma Thompson and producer/director JJ Abrams:

“The pending deal would also give William Morris clients something only the biggest stars to date have been able to command in film and television: an ownership stake in the videos they create for the online video website, according to people familiar with the discussions. Under the scenario, William Morris would also lure some of the talent agency’s major consumer brands to YouTube’s programs as sponsors — a milestone for the site, which has a massive online audience but has struggled to attract advertising.”

And that advertising is key.

While YouTube will continue to showcase amateurs and independent producers, the advertisers clearly want mainstream media. Notes the article, “Advertisers who wouldn’t think twice about buying time on VH1’s ‘Rock of Love,’ a reality TV series featuring Poison front-man Bret Michaels and scantily clad women, remain squeamish about promoting products next to the videos YouTubers create.”

Damn advertisers.

Now, Hollywood on YouTube is nothing new. Indeed, YouTube’s popularity is largely due to Hollywood-produced content such as “Lazy Sunday,” the Saturday Night Live skit that attracted 5,000,000 viewers to the relatively unknown site before NBC ordered the video taken down. And long before all this William Morris chatter, YouTube had forged partnerships with Universal Music Group (where I launched my career), Playboy, 20th Century Fox, the NBA and other massive megacorporate media providers.

So what does this mean for the indies and amateurs?

I have several friends who produce content for YouTube and participate in its revenue sharing program. On the plus side, Hollywood content will draw more traffic that might chance upon my friends’ work. The deals also ensure that YouTube has advertiser revenue to share. On the minus side, indie videos could get muscled off of YouTube’s coveted homepage, where the logic behind video selection is a carefully guarded secret. In addition, Hollywood content will also nudge many amateur videos off the “most viewed” and “most subscribed” lists, where many new filmmakers get discovered.

The bar has also been raised on quality. As I wrote in my post on Joss Whedon’s “Dr. Horrible”, the talent and production values that Hollywood brings to the table are putting enormous pressure on amateurs to keep pace. One of my filmmaker friends told me that, just a couple of years ago, a few simple special effects in his videos could elicit oohs and ahhs, laudatory comments, and thousands of views. Now, jaded YouTube viewers are sounding like the girl in the Billy Idol song: they want more, more, more.

I do believe extraordinary amateur and indie videos will still surface. There’s a certain innocent charm to middle school students in Pittsburgh cranking out a rock song — a charm that Hollywood can’t replicate:

Consequently, this Pop Rocks video attracted over half-a-million views in its first week (helped, of course, by the fact that the Steelers are in the Super Bowl). Hmmm, amateurs working with powerful brands — there’s an idea worth exploring… (And I’m not just talking about those tired “user generated” commercials.)

But for most YouTube producers, the turf keeps getting more crowded with Hollywood moguls and their big-budget productions. How long before the indies are forced to hire Hollywood stars just to compete? If you don’t think that will ever happen, take another peek at Sundance, where one of this year’s most talked about movies, Push: Based on the Novel by Sapphire, featured Lenny Kravitz and Mariah Carey… as supporting actors.

Update 4/16/9: Three months after I wrote this article, TechCrunch asks a similar question: “Is Web 2.0 Abandoning the UGC Ship?”. Meanwhile, my friend Nalts notes that YouTube is following the Hulu route by streaming full-length Hollywood content.

Update 5/6/9: Metacafe actually beat YouTube to the punch (for once) by kicking independent producers to the curb and focusing on professional content. The VC-driven wannabe site just terminated its much vaunted Producer Rewards program. I guess Metacafe got tired of copying YouTube and decided to copy Hulu instead.