Lionsgate, YouTube strike ad-share deal

Details of branded channel pact still in works

Lionsgate has signed a deal with Google's YouTube that will establish unprecedented cooperation between a film studio and the controversial Web site.

It could be the first of many such pacts, say sources, who note that fellow studios including Disney, MGM, Universal and Warner Bros. are likely to follow with their film and TV content.

The deal, first mentioned Wednesday by Google CEO Eric Schmidt in a speech at the Madison & Vine Conference in Los Angeles, was confirmed by Curt Marvis, president of digital media at Lionsgate.

"You can take the strategy of fighting an endless war of trying to take down and resist YouTube or you can take the strategy of embracing the fact people seem to want to watch content in this way," Marvis said.

While details of the deal are still being worked out, the revenue-sharing agreement will formalize the creation of a Lionsgate-branded channel where advertising will be placed on clips of Lionsgate assets ranging from the "Saw" franchise to classics like "Dirty Dancing." Lionsgate's TV programming, including "Weeds," is also a part of the deal.

Marvis noted that the deal also could allow Lionsgate to set up a transactional model in which YouTube users consuming a particular clip could be served a link to a relevant full-length digital download for purchase.

Otherwise, the agreement calls for providing more clips for users to make their own via mash-ups and the like, as well as other engagement-building tools. Lionsgate could be better positioned to market upcoming releases and create an afterlife for library product.

What the deal likely doesn't call for -- though doesn't necessarily exclude -- is distribution of full-length content. YouTube has been experimenting in recent weeks with making longform independent films available via its Screening Room section.

Film companies have lagged behind other content owners who keep their YouTube channels well stocked with clips to promote their content in traditional channels. Film studios date tend to limit their involvement on YouTube to advertising on the site or posting film trailers.

Said Marvis, "I think we're the first studio to make a move to really try to create a new level of monetization of the YouTube audience."

The branded channel does not yet have a launch date. Lionsgate currently has a different version of the channel on YouTube where it stockpiles trailers and other strictly promotional material, an arrangement also in place with film labels including Fox Searchlight and Fox Atomic.

But the primary distinction between the existing channels and what Lionsgate will be the first to try is adding significant scale to the content shared online.

Film studios have long been torn between harnessing the massive YouTube audience and protecting their copyright. Furthermore, stumbling blocks that have prevented such deals are settling on the right revenue splits -- Google prefers a pay-for-performance model -- and clearing the multiplatform rights from various unions.

Key to the collaboration is Google's content identification tool, which allows copyright holders the option to monetize, track or remove content.

The YouTube deal signals Lionsgate's aggressive stance pursuing digital opportunities under new media czar Marvis, who moved over to the studio three months ago from the helm of CinemaNow. Lionsgate already has a stake in another online video hub,