The MGM studio is eager to monetize its library however possible and it will allow YouTube to stream certain MGM movies and TV skeins in their entirety in exchange for ad coin. YouTube has recently begun streaming full TV episodes and indie films, but until now it has only presented streamed clips of the studio’s movies.

This contract gives YouTube the possibility to fight Hulu, the joint venture of News Corp. and NBC Universal, which streams full TV episodes and movies. Initially, MGM will allow YouTube to stream action movies like “Bulletproof Monk” and “The Magnificent Seven”, along with clips from movies such as “Legally Blonde”. In addition, YouTube will stream episodes from the skein “American Gladiators.”

Under its deal with CBS, YouTube has also begun streaming episodes from the original “Star Trek” and “Beverly Hills 90210”. The site has also experimented with full-length episodes from HBO and Showtime. The next companies YouTube wants to sign an agreement with are the Warner Brothers and Sony. Even if certain digital networks execs are reluctant to enter deals with YouTube, afraid that the site could allow unauthorized materials, the company has developed a VideoID feature in order to better identify content and monetize it.

The new partnership with Metro-Goldwyn-Mayer (MGM) will be announced on Monday. Until now, YouTube videos were predominantly short clips of ten minutes or less, but there’s a tendency to enlarge the duration of the clips in order to gain more ad money. YouTube’s rival on the full length movies or shows market, Hulu, features up-to-date shows from News Corp’s Fox networks, NBC and CBS. It will be an interesting battle between these two, especially because YouTube still has to face a $1 billion lawsuit from Viacom for copyright infringement.

Hulu now has about 100 million video streams a month. Compared to YouTube, that's a small number, because YouTube has five billion videos. Last month YouTube added “theater view,” a larger video player for longer content. Even if the plan is to gain money by advertising during long movies, the short clips remain the popular ones. The average duration of an online video was 2.9 minutes in July, according to a measurement by ComScore.

YouTube is a video sharing website where users can upload, view and share video clips. YouTube was created in February 2005 by three former PayPal employees, Chad Hurley, Steve Chen and Jawed Karim. It was bought by Google on November 13, 2006 for 1.65 billion dollars.