According to a report published recently, Metro-Goldwyn Mayer Studios, better known as MGM is the first major movie studio to post full-length feature films on YouTube, the world's biggest stage for online videos.

After spending months smoothing fractured relationships in Hollywood, YouTube as reported by CNET News on Thursday, is preparing to launch a feature-film service on its website.

Apart from MGM, other studios will also most likely post full-length feature films on YouTube. Only last summer Lionsgate and YouTube announced their partnership, according to which the former is allowed to post shots from film and TV shows on the popular website.

This is, indeed, a turning point in a relationship fraught with distrust and bitter feelings. However, that was before Google, the parent firm of YouTube was in the driver's seat. The posting of film and TV show clips on the site, had Hollywood and the entertainment industry angry about infringement of copyrights, especially, when YouTube executives said they were completely powerless to prevent it, even while, YouTube continued to amass an enormous following due to the posted film / TV clips.

With the law on its side, YouTube could not be held responsible for crimes committed by others. Adding further to Hollywood's immense frustration, Google asked for written requests to be sent in, if any copyright owner wanted a clip to be removed.

This softening of Google's stance comes after the formation of video portal - Hulu by NBC Universal and News Corp. It has not only become the top outlet for watching full-length films and TV shows on the Internet, it has also generated and equal number of advertising dollars in the first year of its business, as YouTube in the three years since its inception.

To duplicate the success of Hulu, Google had no option but to mend its relationship with the film studios by developing systems and video players that help keep pirated clips off the site and present clearer images than the standard video players. It has also developed financial terms that are more flexible than in the past, which allows studios to pocket 70% of the profits, with Google getting the rest, say the sources.

Though the deal between Metro-Goldwyn-Mayer Studios and YouTube is not known, however, MGM is kicking off its partnership with episodes of its 10-year old 'American Gladiators' programme, together with full-length action films like 'Bulletproof Monk' and 'The Magnificent Seven', including clips from popular movies like 'Legally Blonde'. One can watch the videos absolutely free of cost, though ads will run alongside the video.

The only hitch is the particular ad. format Google insists on, including whether users will be happy with all the ads accompanying a feature film and which are required for profitability. Even so, more digital deals are in the pipeline according to Hoffner, a YouTube executive, while other potential Hollywood candidates include Time Warner and part MGM owner Sony.