ASPEN, Colo. (CNNMoney.com) -- YouTube and mainstream media companies will be able to peacefully co-exist, according to many top media executives.

Speaking at a panel discussion about entertainment in the digital age at the FORTUNE Brainstorm conference Thursday morning, high-profile media veterans expressed optimism that user-generated content will present more of an opportunity than a threat to large media firms.

Michael Eisner, the former CEO and chairman of Walt Disney (Charts), said that sites such as YouTube, which features thousands of videos created by consumers without media experience, are great, but that ultimately viewers still want to see content created by professionals.

"At some point in time, people have to say that of 100 million bad jokes out there, there are really only 18 good ones," he said, adding that the best thing about YouTube and other video sites is that it will offer the opportunity for more people with true creative talent to get noticed.

"The only difference technology has given you is that you don't have to be in L.A. You can be anywhere in the world," he said. "But not everyone has the gift to tell a story."

Robert Kotick, the chief executive officer of video game software publisher Activision (Charts), agreed, saying that there will always be demand for games, movies, television shows and other forms of media created by people who do this for a living.

"What Brian Grazer does can't equally be duplicated," Kotick said, referring to the movie and TV producer who also spoke on the panel. "Professional creators of content will have more outlets to express it from."

The key for the big media organizations, executives said, is realizing that they can also take advantage of the Internet to distribute their programming.

To that end, David Poltrack, the chief research officer for CBS (Charts), said that his company now is focusing on a "platform agnostic position to technology." In other words, CBS is embracing digital forms.

Other executives on the panel said that it would be a bad idea to ignore the promise of user-generated content.

"I love the idea that we are all part of this democratized media world," said Dan Gillmor, director of the Center for Citizen Media, a non-profit organization.

But some said that Hollywood does face some threats from the emergence of free Internet video sites.

Ken Miller, a senior advisor with Lehman Brothers (Charts), said that media companies are still trying to figure out just how they can make money off the Internet, and whether or not advertising models will be more successful than selling programming on a subscription basis.

"There is a real tension for media companies on how to get ad dollars online," he said.

Jerry Murdock, a managing director with private equity firm Insight Venture Partners, said mainstream media organizations need to pay closer attention to how younger viewers who have grown up on the Internet want to interact with, as opposed to passively watch, programming.

This trend, Murdock said, could create some copyright challenges for big media firms since many videos on popular video sharing sites feature so-called "mashups," blending Hollywood programming with original content

"Kids are deciding the course of media," he said. "There is a collision between user-generated content and mainstream media."

Clearly, the challenge for media companies will be to find a way to make peace with the YouTubes of the world.

And some have already decided to do that. General Electric's (Charts) NBC struck a deal with YouTube earlier this week. YouTube will promote some of NBC's fall programming on its site and will allow users to submit promotional videos for NBC's sitcom "The Office."

CBS's Poltrack said that his network is in discussions with YouTube and other video sharing sites regarding similar promotional deals.

But at the end of the day, Activision's Kotick said that despite all the hype about user-generated content, mainstream media companies don't face extinction anytime soon since there are still millions of people watching traditional Hollywood programming.

"Things don't move as fast as people often think it will and technology doesn't get embraced as quickly as possible," Kotick said.

FORTUNE Magazine is owned by Time Warner, which also owns CNNMoney.com. The reporter of this story owns shares of Time Warner through his company's 401(k) plan.