YouTube and the William Morris Agency are nearing a deal that would put the Hollywood talent broker's clients in made-for-YouTube productions, according to a report in The New York Times.

The YouTube deal would reportedly give William Morris clients an ownership stake in the videos they create for the popular video Web site. William Morris represents the likes of actors Denzel Washington and Russell Crowe and producers Michael Bay and J.J. Abrams.

An agreement would give the agency's clients, which also include musicians and other celebrities, access to at least 100 million viewers, the latest figure comScore offered for YouTube traffic.

"This is inevitable. It's good for YouTube and good for people who are creating content that can't find a place on the TV or cable networks," said Phil Leigh, senior analyst at Inside Digital Media.

Monetizing YouTube Content

The Times cited anonymous sources who were not authorized to speak about the deal publicly. Those sources called the reported deal with the William Morris Agency YouTube's most far-reaching agreement yet to add professionally produced videos to the site. Most of the videos are user-generated.

The William Morris Agency and YouTube could not immediately be reached for comment. But the Times quoted Fred Davis, a senior partner at entertainment law firm Davis, Shapiro, Lewit & Hayes, as saying that the deal may include traditional media talent looking to expand into Web properties.

"Although everyone realizes that the monetization of this content is not quite there yet, everyone also realizes the huge potential as the digital media business Relevant Products/Services matures," Davis told the Times.

Davis pegged YouTube's prime motivator: Monetizing content at its high-traffic video portal. The Google-owned company has attempted to generate revenue streams from advertising on the site, but most of the content is user-generated and the revenues have not reached what YouTube sees as the site's potential. To reach that potential, the site needs premium content.

Searching for Premium Content

"YouTube would like to get premium content in addition to the user-generated videos. They would like to get NBC, ABC, CBS and the others to come on to YouTube. But those folks have been kind of reluctant to do that," Leigh said. "YouTube has negotiated with them in good faith and asked for premium content. They made some progress. You can get old episodes of Star Trek on YouTube. There's advertising on there and the copyright holder gets paid for that. But YouTube would like newer, more popular content, and Hollywood and the TV and cable network Relevant Products/Services providers have been reluctant to offer it even with advertising support."

The William Morris agency apparently feels differently. As Leigh sees it, the agency has clients who are producing shows that may be getting turned down by the networks. Others, as Davis mentioned, may want to explore the Web.

"There's not a shadow of a doubt that these discussions with the William Morris agency have been going on for a long time," Leigh said. "The fact that YouTube is finally agreeing to it here signals their disappointment with the Hollywood studios and the major networks not providing more than old episodes of Star Trek."