August 19, 2009 / 4:33 PM / 10 years ago

YouTube signs deal to feature Time Warner cable shows

NEW YORK (Reuters) - YouTube has signed a deal with Time Warner Inc to feature program clips from a range of its cable networks, including CNN, Cartoon Network and TNT, the online video site said on Wednesday.

The cast of "Gossip Girl" in an undated photo. REUTERS/Handout

The move is the latest by the Google Inc-owned video service to increase the range of video clips through which it can sell advertising as it tries to improve its chances of becoming profitable in the near term.

Currently, most YouTube clips are uploaded by users. But marketers are reluctant to advertise alongside so-called user generated content, fearing the clips will either look unprofessional or feature inappropriate subject matter.

No financial details of the deal with Time Warner were disclosed but both sides will share advertising revenue.

Some Time Warner-owned short-form program clips are already available on YouTube including HBO promotional videos and CNN International news outside the United States.

The new deal will expand the Time Warner material on YouTube, adding clips from programs featured on TV networks CNN, Cartoon Network, Adult Swim, The CW, and TNT as well as some Warner Brothers movies.

Included in the deal are popular programs like “Gossip Girl” and “The Ellen DeGeneres Show,” and executives said that both sides will work on expanding the deal in the future.

An expanded deal could see more full-length programing on the website similar to Hulu, a popular video service owned by News Corp, NBC Universal and Walt Disney.

“It’s really important to get them on the platform and then it opens up new opportunities,” YouTube head of partnerships Jordan Hoffner said. “The content that’s produced by Time Warner lends itself to short form like the news clips from CNN or the cartoon shorts from Cartoon Network.”

As part of the deal, YouTube will also be integrating the Time Warner player into the site.

YouTube signed a similar partnership with Disney in March, which included program clips from ABC and ESPN cable networks.

Though YouTube is easily the most popular video sharing site globally, it is under pressure from Google investors who say the four-year-old company has yet to turn a profit for its owners. Google paid $1.65 billion for YouTube in 2006.

Google has never formally broken out YouTube’s financial performance, but last month indicated that the site might be performing better than Wall Street and others have speculated.

But with over 20 hours of users’ videos uploaded every minute, analysts point to the huge costs involved in being the world’s top free-to-view Web video service. They estimate YouTube’s losses run between $200 million to $500 million a year.

Although YouTube hopes to increase the amount of premium videos from partners like Time Warner, Hoffner said, there will be no move to slow the rate at which users can upload and stream personal videos on the site.

“Both strategies can coexist peacefully,” said Hoffner.

Time Warner shares rose 48 cents, or 1.8 percent, to $27.32 on the New York Stock Exchange. Google shares were flat at $444.20 on the Nasdaq.

Reporting by Yinka Adegoke; Editing by Leslie Gevirtz, Gary Hill

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