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By Yinka Adegoke
NEW YORK, Oct 10 (Reuters) - YouTube, the largest video-sharing Website, has started to run full-length TV shows from CBS Corp’s CBS.N archive, in its latest step to boost advertising revenue by adding professional programming.
The site, owned by Google Inc (GOOG.O), said on Friday it was talking to other TV networks to sign similar deals to CBS. Many TV networks already run short clips on YouTube, which also offers millions of home videos uploaded by users.
A mix of archive CBS shows, including “Star Trek,” “Young and the Restless” and “Beverly Hills 90210,” will now be available in full-length episodes of 20 minutes to 48 minutes.
The shows will have a full-length badge to distinguish them from shorter clips, and will be available in a new ‘theater’ mode to improve the viewing experience, YouTube said.
Until now, YouTube videos were predominantly short clips of 10 minutes or less. The company has been experimenting with full-length shows for some months with Time Warner Inc’s TWX.N HBO and CBS’s Showtime cable networks.
The new partnership will put YouTube in more direct competition with Hulu, the online video site owned by News Corp NWSa.N and General Electric’s (GE.N) NBC Universal.
Hulu features up-to-date full-length shows from News Corp’s Fox networks, NBC and CBS. It also has a YouTube channel which features short-clip versions of its shows.
YouTube’s audience size dwarfs Hulu. YouTube is the world’s largest online video site with more than 330 million users in August, according to Web audience measurement firm comScore. Hulu by comparison had just 3.3 million users.
But even with more than 13 hours of video uploaded every minute, YouTube has struggled to establish a strong advertising business model to justify the $1.65 billion price tag that Google paid for the site in 2006.
Advertisers have been reluctant to commit major marketing dollars to running brand campaigns alongside grainy, unprofessional home videos.
This is partly why YouTube executives have been working on deals to extend their relationship with media companies. Google and Youtube are also fighting a $1 billion copyright infringement lawsuit from Viacom Inc VIAb.N over content uploaded to the site without Viacom’s permission.
YouTube executives said CBS would sell the advertisements around the shows. Both companies will share advertising revenue, but financial terms of the relationship were not disclosed. CBS could not immediately be reached for comment.
“It’s all about advertisers maximizing their reach and using the most effective ad format for where the user might be situated,” Shiva Rajaraman, a senior product manager for YouTube, said in an interview.
Google investors and Wall Street analysts have raised concerns about when YouTube will start to make a meaningful contribution to the search advertising leader’s bottom line.
Analysts at Piper Jaffray estimated that YouTube would earn around $200 million in revenue next year, compared with Google’s expected revenue of around $27 billion.
YouTube said on Tuesday it would start to sell music and video games in its first step into online shopping.
Editing by Lisa Von Ahn; Editing by Bernard Orr