From: CNet.com —

Video steaming giant YouTube has closed a deal with at least one major movie studio to offer its feature-length films online and is courting other film distributors.

As CNet’s Greg Sandoval reports, “To be sure, not all the studios are prepared to give YouTube full-length movies. [However,] Canadian film company Lionsgate agreed in July to give YouTube access to only short movie clips. At least one other studio is trying to cut a similar deal for short-form content with Google.”

Whether YouTube attracts other major Hollywood studios may depend on what kind of deal it’s willing to offer on placement of ads in and around the films it offers:

“There’s skepticism in some circles about whether enough ads can be placed into a streaming movie to make it profitable without also overloading viewers with commercials.”

YouTube’s move into feature-length content places it head-to-head with Hulu, which specializes in full-length content and is backed by NBC Universal and News Corp. Currently, the relatively new Hulu attracts only a small fraction of the users enjoyed by the iconic YouTube.