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Page last updated at 07:33 GMT, Tuesday, 11 November 2008
YouTube's movie deal

By Jim Reed
Newsbeat technology reporter

YouTube logo
YouTube has found it difficult to sell to potential advertisers

The world's largest video sharing website, YouTube, has finally signed off on a deal to show full-length films for the first time.

Aging titles like Bulletproof Monk and Lone Wolf McQuade will be available under an agreement with Hollywood studio MGM.

The movies will be free to watch, with advertisements running alongside the on-screen video.

But the service will only be available to viewers in the US at launch, with a UK deal possible further down the line.

A spokesman said: "We are in negotiations with a variety of entertainment companies but we can't speculate about what future deals there may be at this stage."

Struggle for profit

YouTube is by far the most popular video site on the web.

Eighty one million people visited from the US alone in September, according to the internet research company Nielsen, while its UK audience is around 12 million a month, making it one of the most popular sites in the country.

But despite all those millions of viewers, YouTube has struggled to make money for its owner Google.

User-created content like home video and webcam footage has proved difficult to sell to potential advertisers.

YouTube has also clashed with some major television and movie companies over the use of pirated material on its site.

Viacom is currently suing Google for $1bn for alleged copyright infringement, with the case expected to come to trial some time in 2009 or 2010.

Hulu challenge

To make matters worse, YouTube is also facing a strong challenge from rival streaming services like the BBC's iPlayer and Hulu, owned by the American television companies NBC and Fox.

Unlike other video sites, Hulu only shows professionally made TV shows and movies from a range of different television networks and studios.

It lets users choose between standard advertising during a programme or longer pre-rolled commercials at the start of the feature in return for limited interruptions.

Shows available include The Simpsons, Bones, Family Guy, The Daily Show and The Colbert Report as well as trailers and older full-length movies like Basic Instinct and Ghostbusters.

Hulu is currently only available in the US, although it plans to launch in the UK and other countries as soon as it can sign international deals with its content partners.

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