The fast-moving digital media world basically cleaves into two parts: those that license, sell or pirate traditional, label/studio-generated content, and Web 2.0 stuff - media created, sampled or collected by people for other people. Apple clearly belongs in the first camp, YouTube clearly in the second.

(Yahoo uncomfortably tries to split the difference, simultaneously pursuing studios and labels, while buying up social networking sites. Not too much has really changed with Yahoo since I wrote about them last year - see 'Yahoo unveils Media RSS spec and elaborates on its schizophrenic strategy'.)

The cleavage becomes apparent in coverage of Chad Hurley's appearance at the AlwaysOn Summit yesterday. Hurley was speaking on a panel with Yahoo, Sony and Michael Robertson, but all eyes were on Hurley as Bubble-blowers continued to salivate over the way-cool vidclip service.

People like the WSJ's Kara Swisher, who moderated the panel, are calling on hot companies to show their profits. Wall Street won't get fooled by a tech bubble again! A typical exchange went roughly like this.

Hurley: We already are generating revenue and developing a new ad platform and building out our sales team.

Swisher: So not profitable, huh?

Hurley: No, not yet.

Robertson: Give them a break, they just started.

Swisher: It's back to the dot-com days!

The real juicy issue is media, not profits, though. `We are not trying to stream full-length programming. We have developed a new clip culture," Hurley said. The site limits videos to 10 minutes. Or as Tony Perkins has it, a "personal content revolution."

Hurley thinks he has protection against liability because the clips are limited in time and because they're responsive to copyright holders demands to remove material. Presumably, he has some legal advice to that effect, but it won't really matter because the business proposition will be so strong.

NBC demanded YT remove clips of Saturday Night Live sketches, which they did, but now NBC wants to use the site to promote its fall lineup, says the Mercury News. There's tons of Jon Stewart on YT but you don't see Comedy Central complaining.

Let's throw all the buzz words at this baby. Clip culture is a powerful long-tail economic engine that wind up wagging the dog of traditional media. YT's energy is from its contributor-users. Right now, unlike Napster in its heyday, YT is anything but a cesspool of copyright rip-offs. Stuff ripped off from TiVO is there for sure, but it's still overwhelmed by Mentos, the history of dance, and cyberspace's funniest home videos.

Hurley can monetize the crap out of this engine, as he plans: "We are in discussions with all of the networks, studios and labels to leverage what we have built." And as long as he keeps what he's built on the Web 2.0 side of the media divide, leaving the Sonys to deal with Steve Jobs, YT will do just fine.

Verne Kopytoff suggests in the Chronicle that it's just a matter of time until YT gets bought up by some needy multibillion-dollar search engine. Hurley's avowal that staying independent is "the best place" for YouTube "undoubtedly convinced few in the audience," Kopytoff wrote. Perhaps it's not the best place for Hurley but based on Yahoo's buys of Flickr and Delicious, it's probably an excellent place for the clip culture.