Blog Post

YouTube to Offer Major Studio Films

YouTube will start streaming ad-supported feature films from “at least one of the biggest Hollywood movie studios,” according to a report from CNET this morning. The videos could hit the site in the next 1-3 months.

youtubescreeningroomThe CNET story falls in line with the vibe we’ve been getting from YouTube, where they’re casting their recent win of full-length CBS TV episodes as the first of many premium content deals in the pipe. YouTube’s official line to CNET’s Greg Sandoval was that it’s “in negotiations with a variety of entertainment companies.”

Though YouTube’s video quality is still bottom of the barrel, it’s hard for any content producer to pass up its gigantic audience. A big push for premium content would bring the site into closer competition with the studio-spawned Hulu.

But will premium video play on YouTube? Alongside the CBS episodes, YouTube rolled out pre-roll and mid-roll ads for the first time. That’s a drastically different user experience from YouTube’s long-established norm of a sub-10 minute video that occasionally displays a single overlay. It’s hard to say whether the new strategy has worked; CBS’ initial run of full-length TV episodes have only garnered tens of thousands of views each. Notably, however, they are buried on a channel that’s added nearly a hundred videos in the last day alone. You have to click through on the “playlists” tab to even find them. Both CBS and YouTube need to do better than that.

Studios have been skeptical that advertising would generate enough revenue to justify giving away movies for free. For instance, a Warner Bros. exec said this March that Hulu made sense for TV shows — especially with its promotional value of pushing people to watch further episodes on actual TV, or to buy DVDs — but not for movies. However, he qualified that by saying ad-supported movies would only work if the audience was big enough.

Lionsgate made a splash by recently starting a YouTube channel, but it only has clips and trailers for now. Meanwhile YouTube started a “Screening Room” section of its site for short films, where it recently posted a full-length feature from The Joy Luck Club director Wayne Wang. It also just improved the section to play widescreen videos in “Theater View.” There’s no reason that section couldn’t host more mainstream fare.

10 Responses to “YouTube to Offer Major Studio Films”

  1. Hey there,
    Our film Four Eyed Monsters was the first feature length film to be screened on YouTube over a year ago and we had the business model of getting people to join with a custom message we added to the front of our film. For every person that joined we made 1 dollar and we raised $50,000 plus another $5,000 on banner revenue from getting over a million views to our film. We made more money then our entire theatrical DIY release and got way more exposure.

    In the film world they usually equate a films theatrical success to how well it will do on DVD and in foreign markets. In our case it substantially boosted our DVD sales, brought foreign deals into the picture and landed us a 100,000 IFC TV and retail DVD deal that we are still in the process of getting paid on, but except for that little detail, the experience was hugely beneficial to our film careers. We are now working on our second feature film As The Dust Settles and are definitely considering YouTube as part of the distribution strategy to this film as well.

    Not only does this make sense for indie films, but I think that larger films also want to capitalize on the exposure of putting a feature film on YouTube. And if they did what Joost and Snag do which is put commercials every 10 minutes then it would be an interesting source of additional revenue for these films as well as great exposure to boost DVD and blue-ray sales.

    Arin Crumley
    Four Eyed MOnsters

  2. YouTube is great for watching short user-gen videos, and it may well also be good for watching full-length movies – but there are currently plenty of movie watching sites out there, Hulu being only one. One thing these online video sites currently lack is a real sense of social activity. Lycos Cinema ( is distinct in that it brings the social experience of watching movies with friends and fellow fans to the online experience – you can watch thousands of films (as well as TV content) in viewing rooms that allow you to chat in real-time with other audience members, or schedule viewing parties with friends.

  3. You’re right, Rich. But other sites have chosen quality as their top priority and it shows. Another way of saying “bottom of the barrel” is “lowest common denominator,” and there’s something to be said for that.

    Akash, no word on ad formats yet. We shall see.

  4. Liz, do you have clarity on what ad formats are going to be used here? Will it be like Hulu – in stream ads and overlays?
    And what films will make it to YouTube? Are they regular features or indie movies?

  5. “Though YouTube’s video quality is still bottom of the barrel”

    Why would you say this? YouTube’s video quality isn’t bottom of the barrel – have you watched through Apple TV or with HQ settings turned on?

    The site became famously popular because it was the first to realize that if everyone came and was able to stream video instantly no matter how slow their (high speed) connection was, they’d be happy and back for more.

    As more and more people ramp up their internet speeds, the site is slowly compensating by letting you choose higher quality streams. While you might take for granted a fast corporate connection, there are still A TON of people out there on basic $14.99 DSL plans that aren’t much faster than dialup.

    YouTube can turn on HQ or HD streams across the board if they wanted to tomorrow – right now it just makes sense to do it for those who ask.