YouTube to Distribute Lionsgate Clips

This post was written by Michael Stroud.

Google CEO Eric Schmidt said today at a conference that YouTube will run ads against video snippets from films like Dirty Dancing posted by producer Lionsgate and fans and share the revenue with Lionsgate.

Schmidt said the new channel with Lionsgate, producer of Saw and Crash will debut in the near future, but didn’t specify when or give more details about the agreement. He said Google is holding similar discussions with other studios. YouTube already has deals with all the major music labels.

“Is that a way to preempt piracy?” we asked him during a conversation with reporters after his talk, given at Ad Age’s Madison & Vine conference today in Beverly Hills. Not exactly, was his response. “It’s a way to embrace a phenomenon,” he said. “It’s more about controlling the environment.”

It’s an environment that wouldn’t exist if fans weren’t posting their favorite clips on YouTube without studios’ permission in the first place.

Earlier, Schmidt called the outlook for newspapers “bleak”, downplaying the optimistic argument that new sources of online revenue will replace eroding ad and subscription revenue. “Evidence suggests that (old) monetization models are not being replaced,” he said. “Users are spending less time.”

We don’t need to ask where they’re spending their time and money.

To be fair, Schmidt said he is deeply concerned about the outlook for newspapers, calling investigative reporting “so fundamental to the way democracies work.” And he predicted that studios, with their highly sought-after films and TV shows will be “first to the gate” in finding new ways to monetize them on the web, as Lionsgate is now doing.

Still, it’s easy to understand why he once again emphasized to reporters later that Google has no intention of becoming a media company.

Lionsgate recently was the showcase trial customer for a new YouTube advertiser product targeting hot videos. The studio also distributes full-length content elsewhere online with Hulu, iTunes, and Amazon Unbox.

Michael Stroud runs iHollywoodForum, a digital media event and media company in Los Angeles.