While royalty rates may be the first thing you think of in the face-off between Hollywood’s major content creators and outlets such as Netflix and YouTube, there’s a much bigger battle brewing under the surface.

Online video, historically, has not been something that compares well with film or television. Production budgets, if they exist at all, are lower — and due to differences in the ad model, there hasn’t been a lot of incentive to create programming that’s on par with what the studios and networks regularly release.

That’s changing, though, with both Netflix and YouTube taking tentative steps into the original content business. And while both are just beginning to explore the field, the moves already have network and studio brass on high alert.

Read more at Daily Variety