Google's YouTube in Lions Gate film clips deal

By Sue Zeidler

BEVERLY HILLS, California (Reuters) - In a move that signals a possible thawing of Google Inc's (GOOG.O) relations with Hollywood, its YouTube unit has reached a deal to feature film clips from Lions Gate Entertainment Inc (LGF.N) on the video-sharing site.

Google Chief Executive Eric Schmidt announced the deal at an Ad Age/William Morris Agency conference on Wednesday and said it would give viewers access to scenes from their favorite Lions Gate movies, accompanied with ads.

Lions Gate later confirmed the deal.

"There are things in our library like 'Dirty Dancing' that have been watched tens of millions of times and it will be nice to get paid for that and to set viewers in the direction of buying movies," Lions Gate Vice Chairman Michael Burns said in a phone interview.

Lions Gate, also home to the popular "Saw" horror movies and Oscar winner "Crash," would appear to be taking more of an "if you can't beat 'em, join 'em" approach towards YouTube.

This is in sharp contrast to media giant Viacom Inc (VIAb.N), owner of Paramount and MTV Networks, which has sued Google and YouTube for $1 billion, accusing them of copyright infringement by enabling unauthorized viewing of its shows like "The Daily Show" and "The Colbert Report."

"Lions Gate is the next interesting example of (a company) trying to get the people who are fans on the Internet and monetize it," Schmidt told reporters.

Burns described the arrangement as a revenue-sharing deal.