San Francisco — For several years, Hollywood used to become enraged when fans uploaded video clips to the internet to share with their friends. The television networks and movie studios balked, and appointed armies of lawyers and sophisticated technology to stamp out piracy while demonstrating their content on their own websites. But now the time has changed and it is looking to cash in on them. Metro-Goldwyn Mayer Studios, prominently known as MGM, in its latest effort to boost advertising revenue will be the first major movie studio to post full-length feature films on YouTube, the largest video-sharing website, according to a published report.
YouTube is by far the world’s largest stage for online video. For months, the Google owned site has been building grounds into Hollywood studios: Give us your films, and we will make you money.
Initially the studios hesitated. Surely they reasoned; YouTube had a massive audience of 74 million monthly users. But the Google-owned site only wanted to give them a share of its ad revenues. It was not offering them any money upfront.
But in some ways Hulu is stealing the show. Now Hollywood is becoming friendly to the Internet’s top video site. On Monday, YouTube the site, owned by Google Inc, plans to move ahead a little, will announce an ad-revenue sharing deal with MGM — home of James Bond, the Pink Panther and Rocky — to show some full-length television shows and films for the first time from MGM, the financially troubled 84-year-old film studio.
Metro-Goldwyn-Mayer Studios will kick off the partnership by posting episodes of its decade-old “American Gladiators” program to YouTube, along with full-length action films like “Bulletproof Monk” and “The Magnificent Seven” and clips from popular movies like “Legally Blonde.” These will be free to watch, with ads running alongside the video.
YouTube in October forged a similar partnership with CBS Corp to run full-length archived shows, including “Star Trek,” “Young and the Restless” and “Beverly Hills 90210.”
MGM will probably not be the last studio to deliver full-length feature films on YouTube, according to an industry source. Last summer, Lionsgate announced a partnership with YouTube, but that deal calls for the studio to offer only short from films and TV shows.
The MGM deal was reported by the New York Times on Sunday.
The primary arrangement may not be all that compelling, but for YouTube, the relationship with MGM is a vital step in an essential reinvention. YouTube had its debut in 2005 and quickly became famous for the democratic sharing of bite-size video clips. Users love the site — 81 million people visited in September alone, according to Nielsen.
Jordan Hoffner, YouTube’s head of content partnerships, called the agreement a “watershed moment” for the company: “We are really happy about MGM. They have an incredible library.”
It is natural to understand why YouTube is excited. Founders Chad Hurley and Steve Chen want the site to be more than just a lackluster destination for clips of skateboarding dogs, experiments involving Mentos and Diet Coke and the occasional Simpson episode that needs to be taken down immediately because of copyright infringement.
After all, there are only so many ads YouTube can put into a short clip like “Tiger vs. Bear.” A feature-length film like “Rocky IV” has room from many more marketing messages.
Many TV networks already post short clips on YouTube, which also offers millions of home videos uploaded by users. The site is already delivers full-length independent movies like “Harold Buttelman, Daredevil Stuntman.”
Although there was lots of distrust and bitter feelings in entertainment circles after the way Google dealt with copyright infringement on its site. But that was when Google was in the driver’s seat. Back then, thousands of YouTube’s users would post clips from TV shows and films on the site and YouTube executives told the studios they were powerless to prevent it — all the while YouTube amassed an enormous following.
Hence, the new partnerships put YouTube in more direct competition with Hulu, the online video site owned by News Corp and General Electric’s NBC Universal. Now YouTube can show off that it has the kind of big budget movies that people can watch on Hulu.com.
There is only one catch-22. MGM — owned by an investor group led by Providence Equity Partners, Sony and Comcast — will only be posting only a few of its 4,000 movies on YouTube at first.
“I do not think you are going to be seeing a James Bond movie on YouTube,” said Jim Packer, MGM’s co-president of worldwide television. “That is a very special franchise for us. We are very cautions about where we put those movies.”
The first MGM movie to go up on YouTube will be a Chuck Norris vehicle, “Bulletproof Monk,” starring Chow Yun-Fat and Lone Wolf McQuade.
Packer said MGM is also thinking about creating a special YouTube site for women to show films like “Fame” and television shows from its vault such as “Cagney & Lacey.”
The YouTube deal would enable MGM to both make money on such less-sought-after content and also promote its DVD and theatrical releases, according to Packer.
“YouTube has a lot of traffic,” he said. “It is no different from being in Wal-Mart. You want to be in a store that has a lot of traffic.”
For Google, YouTube’s parent company, the deal is a turning point in its relationship with Hollywood.