If you can’t beat ’em, join ’em. Rather than fight its fans, Lionsgate has made a deal with YouTube aimed at satisfying — and monetizing — the people who post clips of its films, like “Dirty Dancing,” which receive millions of views.
The studio will make excerpts from several hundred of its film and TV productions available on a branded YouTube channel that will allow users to share, embed, upload and mash up the clips.
Jordan Hoffner, YouTube’s head of premium content partnerships, said his company is in talks to strike similar arrangements with other studios.
Pact follows other clip deals, but is noteworthy for its user flexibility at a time when Viacom is embroiled in a $1 billion copyright infringement suit with YouTube parent Google.
Google chairman-CEO Eric Schmidt broke the Lionsgate news Wednesday morning at the Beverly Hills Hotel while participating in a Q&A with Ad Age Digital editor Abbey Klaassen as part of Ad Age’s Madison + Vine conference.
YouTube and Lionsgate will share advertising revenue from the channel, which will likely be launched before Labor Day. The number of clips on the channel, Schmidt said, is “up to the content owner. (But) it’s in their best interest (to have) more.”
The deal also could highlight the contentious issue of what digital residuals might be owed to actors and other profit participants.
“Revenue generated with any piece of Lionsgate content is recorded and documented,” said Curt Marvis, Lionsgate’s president of digital media. “Splits are still to be determined, but there will be a trail of knowledge. I think that’s still being discussed (with guilds).”
The deal has similarities to one struck between YouTube and CBS nearly two years ago, just before Google announced its acquisition of YouTube. A few months ago, Hulu, the joint venture of News Corp. and NBC Universal, loosened its restrictions on YouTube file-sharing, allowing short clips with embedded Hulu ads to stream on a branded YouTube channel.
However, the Lionsgate partnership calls for a heretofore unseen spirit of generosity in its user permissions.
“(The partnership) grew out of discussions about claiming — the process of getting content off YouTube,” Marvis said. “But if there’s an audience for our content, it was like, ‘Wait a minute. Let’s not put our heads in the sands here. Let’s give them what they want and get revenue from it.'”
Marvis added: “We’re trying to be as progressive as we can be as opposed to shutting them down. That didn’t seem to work very well for the music industry.”
Lionsgate vice chairman Michael Burns said the channel would also include links that give users the opportunity to purchase the full-length movie or TV show. “YouTube gets 300 million uniques,” he said. “It’s a great place to get people watching content. It’ll be a good driver of sales.”
Marvis added that Lionsgate also planned to use its YouTube relationship to remove content. “If we see clips from ‘Saw 5’ and it’s still in its theatrical window, we’ll see that it’s pulled down,” he said.
Latest pact is part of a major YouTube push to beef up its showbiz offerings. YouTube recently created a section of its site called the Screening Room dedicated to streaming shorts by indie filmmakers, while Google recently inked a partnership with “Family Guy” creator Seth MacFarlane to create 50 webisodes.
However, Schmidt emphasized he doesn’t see Google being part of the content-creation business.
“There’s a line,” he said. “We should not be in businesses we don’t understand.”
Rather, he said, it was “better to invent a whole new industry,” as Bill Paley did with the creation of CBS as the first major broadcasting network.
“There are such people today,” he said. “We just have to find them.”
(Diane Garrett contributed to this report.)