YouTube Launches Feature Movie, TV Episode Section

April 17, 2009

(ChattahBox) — In a bid to challenge Hulu in the online video space, YouTube on Thursday unveiled an agreement with major Hollywood studios who have not been friends in the past, including Sony, CBS, and Metro-Goldwyn-Mayer, to show their movies and TV shows on a new section of the online video site. Hulu, a joint venture of NBC Universal and the News Corporation is perceived by YouTube to be a competitive threat, featuring NBC and Fox TV shows among others.
Other studios that have agreed to show entertainment on YouTube include Walt Disney and independent film studio Lions Gate Entertainment and Liberty Media. YouTube and Vivendi’s Universal Music Group have partnered in building a new music and entertainment site called Vevo that will feature UMG videos. The pacts with media companies allow YouTube to place ads before, during and alongside the videos and split the revenue with its partners.

So far though the quest to transition from amateur videos to a destination for mainstream TV programs and movies, is weak with an offering of second rate shows that only the totally nostelgic might find enticing. It does set the table though for a later offering of pay per section for premium content.

Google acquired YouTube for $1.65 billion in 2006 on the hope it could transform the massive traffic into a healthy business. But that has proved elusive, and a recent report by Credit Suisse estimated that the site will lose $470 million on about $240 million in revenue this year.


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