YouTube Wants to Go Hollywood, but Will it Pay?

Video-Sharing Service Is Close to Inking Deal With Uber-Talent Agency William Morris

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YouTube's need for marketer-friendly content is well known, but so is its aversion for paying for it. The New York Times reports today that Google's video-sharing service is close to a deal with the William Morris Agency to develop web productions with the agency's talent roster, which includes Denzel Washington and directors J.J. Abrams and Michael Bay. But the question is: Can WMA persuade Google's video-sharing service to put any skin in the game?

Philosophically, YouTube does not pay for content; it prefers to share advertising revenue with content partners, such as in its deals with CBS and Next New Networks. The one type of content it did pay for is music videos, but that has become the source of a dispute between the video-sharing service and Warner Music Group, which pulled its videos when talks on renewing their deal broke down last year. And it's notable that Google/YouTube put no upfront money into one of its highest-profile original content deals, Seth MacFarlane's "Cavalcade of Cartoon Comedy."

Most of YouTube's content deals involve repurposed TV shows (already paid for) or low-budget web content. But William Morris isn't known for doing anything low budget. Can it persuade Google/YouTube to share some of the upfront risk?

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