Sony films headed to YouTube?

 

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By Stuart Turton

Posted on 7 Apr 2009 at 12:10

Sony is reportedly in talks with YouTube to license full-length films which it would screen on the site.

News of the talks between YouTube and Sony come courtesy of Cnet which cites "sources familiar with the negotiations".

Although Cnet doesn't offer further details of the deal, it wouldn't be without precedent. In November 2008, YouTube announced a content deal with MGM to screen full-length films, including The Magnificent Seven, on the site.

If the Sony deal followed the MGM model, the films would be free to watch but have ads running alongside the video.

Such a deal would move YouTube increasingly into competition with Hulu, a US-only service which screens ad-supported films and has already proved a massive success for News Corp and NBC Universal - the companies backing it.

Such a move could prove timely for YouTube. The service is set to lose around $470 million in 2009, according to Credit Suisse analysts Spencer Wang and Kenneth Sena.

Although, Google does not release financials for YouTube, the two analysts claim in a report that YouTube will generate about $240 million this year, but that overheads including bandwidth and licensing will cost the company $711 million. It's a staggering figure, given Google only paid $1.65 billion for YouTube.