MGM to Post Full Films on YouTube
SAN FRANCISCO — YouTube is by far the world’s biggest stage for online video. But in some ways Hulu is stealing the show.
With critical plaudits and advertising dollars flowing to Hulu, the popular online hub for television shows and feature films, YouTube finds itself in the unanticipated position of playing catch-up.
On Monday, YouTube will move forward a little, announcing an agreement to show some full-length television shows and films 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.
The initial lineup may not be all that compelling, but for YouTube, which is owned by Google, the relationship with MGM is a crucial 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.
But Hollywood executives have complained over the way clips of their movies and shows pop up on the site without their permission. And advertisers have found that user-created videos of pet pratfalls and oddball skits are largely incompatible with commercials for cars and other products. Revenue at YouTube has disappointed Google investors since the company bought the start-up in 2006.
Now YouTube is trying harder to make friends with Hollywood — and emulate the appeal of Hulu, a joint venture of NBC and Fox. Along with its MGM relationship, YouTube has recently forged ties with the independent studio Lionsgate and with CBS, which this month started posting to YouTube full-length episodes of older shows like “Star Trek” and “Beverly Hills 90210.”
“We believe in comprehensiveness, and we want to have deals with everybody,” said Jordan Hoffner, the director of content partnerships for YouTube. “We want to be able to give users the most content possible.”
In the last few months, YouTube has swept its virtual floors and painted its stage as it prepares to offer more professional videos. This month, it introduced a “theater view” button that expands the viewing screen and darkens the rest of the Web page for optimum viewing — a feature similar to one introduced by Hulu.
YouTube has also developed a system called VideoID. It allows media companies to spot unauthorized clips of their material on the site, and then either remove the clips or leave them up and sell ads on them. As part of its deal, MGM will begin scouring YouTube for studio clips, from properties like the James Bond and Rocky franchises, and pulling many of them from the site.
But MGM will also work with YouTube to choose which clips can remain online, supported by advertising.
“YouTube is essentially saying to media companies, ‘We are sorry for our past copyright stance; we weren’t thinking big enough. Let’s see how we can make some money together,’ ” said James L. McQuivey, an analyst at Forrester Research.
Mr. McQuivey thinks the strategy can work. “They have hundreds of millions of views,” he said, “and it will be very hard for studios to pass that up.”
For now, the studios appear to be dipping their toes in cautiously. Many Hollywood executives complain that YouTube’s online presentation is too cluttered.
They also say they are more comfortable with the cleaner, better organized Hulu, which does not have amateur-created videos and which sprang from their own ranks. Hulu had 6.3 million visitors in September, according to Nielsen, and has more than 100 sponsors trying out creative forms of advertising, like interactive games.
Jim Packer, MGM’s co-president, said his studio was starting slowly on YouTube, with action films intended to promote the studio’s video-on-demand channel, Impact, on Comcast. He said other MGM material would move to YouTube soon, including films like “Moonstruck” that appeal to women. But he did not see putting a significant part of the studio’s catalog on the site anytime soon.
“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,” Mr. Packer said. “I feel much more comfortable doing that on a site like Hulu.”
Lionsgate has also tiptoed onto YouTube, putting up clips from certain films and TV shows and directing viewers to sites where they can buy the DVD or pay for a full-length download.
“We didn’t have huge expectations for this year,” Curt Marvis, Lionsgate’s president of digital media, said of the studio’s presence on YouTube. “We are still discussing, as I think YouTube is with every studio, how we can further take advantage of this audience.”
Mr. Hoffner, the YouTube executive, hinted that more digital deals were in the pipeline. Potential candidates, according to Hollywood and high-tech executives, include Time Warner and Sony, a part owner of MGM.
A Sony spokeswoman said the studio was already putting abridged versions of older shows, called minisodes, on YouTube, and that no larger deal was imminent — at least in the next few weeks. Time Warner is conducting some technical trials of YouTube’s clip identification system.
The ice between YouTube and Hollywood clearly has yet to thaw. During its first few years, YouTube stood behind the Digital Millennium Copyright Act and told media companies it was not legally required to remove unauthorized material from its site unless specifically asked to do so by the owner.
The stance provoked a $100 billion lawsuit from Viacom, which is still pending, and animosity from media executives who say they still believe YouTube could be more aggressive in taking down pirated clips.
“A lot of studios have taken the position that they won’t embrace YouTube until everything is perfect and the copyright protection is ironclad,” Mr. Marvis of Lionsgate said.
But YouTube may face an even greater challenge in the effort to transform itself. Ken August, vice chairman of Deloitte & Touche and the head of its media and entertainment practice, said the largest studios were in a state of inertia — willing to experiment with online distribution but mostly aiming to protect their traditional way of doing business.
They are also waiting to see what will happen with Viacom’s lawsuit, Mr. August said.
“There needs to be a major realignment inside some of these companies for profound digital deals to happen,” he said.