Lionsgate Secures Its Cut in YouTube Ad Deal

The deal will put advertising on clips uploaded by users and by the studio itself from Lionsgate movies such as the "Saw" horror series and "Dirty Dancing."

Embracing, Not Suing

The deal would make Lionsgate the second major moviemaker to try to profit from the popularity of online movie clips.

"It's another example of a very, very creative group taking advantage of their brand and then using the distribution network , the Internet, to actually capture new users," said Google Chief Executive Eric Schmidt, speaking at a conference put on by Advertising Age and the William Morris Agency.

In March, Viacom's (NYSE: VIAb) Paramount Pictures launched a more limited clip-sharing Facebook application called VooZoo that allows users to share studio-made clips using points that they can purchase.

Lionsgate's president of digital media, Curt Marvis, said the YouTube channel would launch by early September.

Popular Clips

Talks about the revenue-sharing deal emerged after Lionsgate worked with YouTube to remove pirated copy from the site, Marvis said. Some unsanctioned "Dirty Dancing" clips on YouTube have generated more than a million views.

"The idea here is not to alienate fans of particular movies or TV shows," Marvis said. "We just want to make some money out of it."

YouTube has similar arrangements with CBS and the British Broadcasting Corp.

A New Market

The announcement came as Hollywood studios continued talks with the Screen Actors Guild that included the issue of obtaining actors' consent and paying them for use of their voice and images in a commercial clips market.

Schmidt said Google was in discussions with other Hollywood studios about similar arrangements, with the exception of Paramount because of a Viacom suit accusing YouTube of violating copyrights of shows on cable networks MTV, Nickelodeon and Comedy Central.