Studio sets licensing deal despite ongoing legal battle

Google and Paramount Pictures have struck a deal to license approximately 500 movies to Google, despite the overhang of the ongoing legal battle between the Internet giant and the studio’s parent company, Viacom.

Titles ranging from “Hugo” and “The Adventures of Tintin” to “The Godfather” will be made available for rental beginning later this month across North America on YouTube. Even more significant is that these are the first new titles that will also come to its new cross-platform storefront, Google Play.

With the Par pact, 20th Century Fox is the only major studio that has yet to license pics to Google. Yet a deal with Par once seemed the most improbable Hollywood partnership of all for Google.

Google and Viacom have been facing off in court over Viacom’s allegations that content from its cable channels were subject to copyright infringement facilitated by YouTube.

While Google successfully defended itself against Viacom’s $1 billion claim in 2010, three years after the conglom filed suit, the verdict was appealed. Last October, an appeals court reopened the case but there has yet to be a resolution.

Why Viacom was willing to finally make a deal for its content isn’t known, though it doesn’t cover any of the TV programming that was the bone of contention between the conglom and Google. It’s possible the reluctance was less a reflection of any legal ramifications and more a disciplined approach to getting the best deal terms for its catalog. It’s unclear whether the deal has any bearing on the legal proceedings.

The pact with Par may be a sign that Google was feeling newly motivated to make a deal given last month’s creation of Google Play, the consolidated approach Google is taking to making all of its entertainment product available in one seamless cloud-based environment across platforms, including its fast-growing mobile storefront, previously known as Android Market.

Google is eager to stay competitive with Apple and Amazon, which have moved considerably faster to offer movies, music and more across a range of devices. Google has also been ramping up the availability of film rentals in at least 10 markets internationally in recent months, though deals aren’t done to extend Paramount titles anywhere beyond North America.

The Paramount deal leaves only Fox on the sidelines. The studio may not have gotten what it believes is a fair offer for its content or may still be pressing Google to take a tougher stand on blocking links to piracy from its search engine. News Corp. CEO Rupert Murdoch has been a very vocal critic of Google on this front.

The last deal Google did with the studios was Disney, which licensed hundreds of movies to YouTube last November and also made a separate deal to create original programming for the site’s new initiative to establish channels. The Paramount deal has no such component.Like iTunes, YouTube makes movies available for rent on an a la carte basis ranging from $1-$4 depending on whether they are library titles or releases timed day-and-date with the homevideo window. Unlike Netflix, there is no monthly subscription fee, which has proven to be a more popular model with consumers than individual transactions., though Netflix doesn’t have many titles any newer than what the pay-TV window allows.

After a slow rollout of its rental store that began at the 2010 Sundance Film Festival with mostly independent titles, YouTube has been gradually building up its library, which is now estimated to have reached 9,000 titles. YouTube relaunched its rental store last May with thousands of titles from Sony Pictures, Warner Bros. and Universal.

“Paramount Pictures is one of the biggest movies studios on the planet,” said Malik Ducard, director of content partnerships at YouTube. “We’re thrilled to bring nearly 500 of their films to movie fans in the U.S. and Canada on YouTube and Google Play.”

Incidentally, Ducard came to Google from Paramount, where he worked in digital distribution until he left the studio in December 2010.

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