YouTube is set to announce a deal Monday with MGM to host some of studio’s content, its latest move to position itself as a player in the commercial online video space.
Initial offerings from the fabled MGM library are pretty weak – highlights include episodes of "American Gladiators" and clips from "Legally Blonde."
But any crack in the wall with Hollywood is good for YouTube, which dominates user-generated content – and, to the chagrin of Hollywood, perhaps user-stolen content as well.
While YouTube has become the leading brand of online video, it has yet to figure out how to monetize its success in any major way. Meanwhile it faces upstart competition from such services as Hulu, which had 6.3 million visitors in September, according to Nielsen, and more than 100 sponsors.
The MGM deal is the latest step in the ramping-up process: YouTube already has deals with both Lionsgate and CBS, and the independent film "The Princess of Nebraska" made its debut on the website in YouTube's screening room, utilizing the new “Theater View” and “Lights Out” modes for longer films.
While these partnerships are a turning point in YouTube's relationship with Hollywood, there are still some looming issues.
Google is in the middle of a $1 billion copyright lawsuit with Viacom, which essentially charges that YouTube's business model is a criminal enterprise. But Viacom is already looking for ways of circumventing piracy and actually profiting off of it with its recent ad deal with MySpace.
YouTube will provide a similar service using its VideoID technology to find MGM content that may be up illegally, and let the studio decide whether to remove it or tack on advertising.
And yet, MGM doesn't seem ready to trust YouTube as a full-fledged distributor.
“We will have some long-form videos up on YouTube, but I don’t think that’s the platform to have 30 or 40 movies up at once,” said MGM co-president Jim Packer. “I feel much more comfortable doing that on a site like Hulu.”
MGM to Post Full Films on YouTube [New York Times]
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