Full-length MGM films on YouTube

YouTube, the largest video-sharing website, will show full-length films from Metro-Goldwyn-Mayer's archives. The partnership is aimed boosting advertising revenue for both YouTube and the Hollywood studio. It will result in the launch of a video-on-demand channel called Impact, dedicated exclusively to action films, TV shows and clips.

"I think it will grow into a nice little business," said Jim Packer, co-president of MGM Worldwide Television. He told the BBC that YouTube made an ideal partner because of its 280 million monthly users. "I think YouTube has something that a lot of sites don't have. "They have a lot of people walking through their front door everyday. And if they are smart in how they grow this, YouTube should have a successful business also," said Mr Packer.

Another channel that has been unveiled will showcase episodes from the popular programme American Gladiators from the 1980s and 1990s. The videos will cost users nothing to download but will contain advertising. Initially they will only be available in the US. But there are plans to open the service elsewhere once rights issues have been cleared.

Google, which bought YouTube two years ago for $1.65bn, has been searching for ways to make money out of the site without driving away its huge fan base. The site has been facing competition from other video-sharing services such as Hulu, which offers programming from NBC Universal and News Corp's Fox as well as MGM.

Under an agreement YouTube has already signed with CBS, users can download classic TV shows such as Star Trek, MacGyver, and Beverly Hills 90210. It has other arrangements in place with companies like the BBC, Sony, Lionsgate and Oprah.

YouTube said that striking a deal with MGM made sense given its commitment to deliver premium content online. "YouTube is committed to helping our community of fans discover new content and reconnect with their all time favourite TV shows and movies," said Jordan Hoffner, director of content partnerships for the company.

"By partnering with MGM, YouTube is strengthening its position as an entertainment destination where Hollywood studios can reach a global audience."