Sony is reportedly in talks about becoming the first major movie studio to put full length films on YouTube. The deal would be a promotional measure for Sony’s multimedia Web site Crackle.

There isn’t much detail from the source who took the story to CNET and neither company is issuing a public comment. However, there’s plenty of details in existing deals elsewhere to give a good idea what the partnership could entail.

Crackle is primarily a site for original web-only content such as True Colors and Charlie Murphy’s Crash Comedy. However, it also includes some Sony-owned TV shows such as Dilbert and several movies. (I should note that most of these movies would not appear on the site for me, though this may be because I am outside the United States.)

As a promotional tool, the site licenses some movies to other sites such as NBC’s Hulu and AOL. However, the deal comes with a catch: the sites must display the movies using the Crackle player rather than their own software, meaning Sony can control the advertising and route viewers to the Crackle site.

CNET speculates that YouTube would be willing to accept this – and a bar on allowing users on embedding the movies on their own sites – simply to get access to the footage and make YouTube seem more of a destination for long-form content such as TV shows and movies. Spiderman and Godzilla are among some of the Sony-owned movies which could be covered by a deal.

The discussions come as a major financial services group predicts YouTube will lose $470 million this year. Credit Suisse says that, based on the site’s current traffic and ad set-up, it’s on course to increase revenues 20 percent to $240 million, but see this wiped out by $711 million in costs, just over half of which will go on bandwidth.

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Entry was posted on Tuesday, April 7th, 2009 at 11:52 am under Online video, YouTube.

Read more entries by John Lister.
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