According to the New York Times, the rumours about YouTube adding full-length movies are about to come true — sort of. The paper says that MGM will announce a deal with the video site on Monday to run some full TV shows and also some movies, with ads appearing alongside them. But the content isn’t really much to write home about:

Metro-Goldwyn-Mayer Studios will kick off the partnership by posting episodes of its decade-old “American Gladiators” program to YouTube, along with full-length action films like “Bulletproof Monk” and “The Magnificent Seven” and clips from popular movies like “Legally Blonde.”

Wow — the chance to watch old episodes of American Gladiators and Bulletproof Monk. Hold me back.

Seriously though, while the choice of material isn’t going to set the universe on fire (although I confess that I was a closet fan of American Gladiators, as well as similar shows like Roller Derby), it is obviously the thin edge of the wedge. Greg Sandoval at CNET broke the latest round of rumours about full-length movies on YouTube last week, and at the time I wondered whether YouTube’s infrastructure could even handle the real-time streaming of movies.

If they’re offering clunkers like Bulletproof Monk and Legally Blonde, maybe they won’t have to worry about traffic just yet. And it’s obvious MGM is barely dipping its toe into the waters at YouTube, as the studio’s comments in the story also make abundantly clear:

“We will have some long-form videos up on YouTube, but I don’t think that’s the platform to have 30 or 40 movies up at once,” Mr. Packer said. “I feel much more comfortable doing that on a site like Hulu.”

Sounds like YouTube has a steep hill to climb before it can convince major entertainment conglomerates that it is the place to be.

Greg Sandoval at CNET had a story today saying that he heard from a couple of sources close to YouTube that the company will soon be launching full-length movies. This led to a raft of posts echoing the story, most of which mentioned that this seemed like a plausible rumour — since YouTube now offers full-length TV shows from a couple of networks, and also has a “theater” setting that offers a wider viewer and slightly better quality. But only a couple of blogs that mentioned the story raised what I think is the most important issue: Can YouTube’s infrastructure even handle the real-time streaming of full-length movies?

Robert McLaws, for example, mentioned what I think is a pretty routine occurrence for most people when watching YouTube videos, and that’s the “buffering” message (I get that a fair bit even though I have an 8-megabit connection). John Brandon at Computerworld mentioned the crappy quality of most YouTube videos, and Nick Carlson at Silicon Alley Insider noted that YouTube videos aren’t actually streamed, but are downloaded to the user’s computer — meaning they can easily be copied.

Will the studios allow such downloading without layering on levels of DRM? Unlikely. In which case, as Nick points out, YouTube might have to set up a different system that actually streams those movies, an infrastructure that theoretically would have to support streaming to tens of millions of people. That sounds like a very expensive proposition — even for a company that has billions of dollars in the bank, as Google does. Billionaire sports and media mogul Mark Cuban has written a lot about doing “real” video over the Internet, and doesn’t think it’s even worth bothering.

As more than one person has already pointed out, the demise of Wal-Mart’s video download service comes as no real surprise. In many ways, it was stillborn to begin with. Why? Simple. Even when it was launched, it was obvious (to everyone but Wal-Mart, apparently) that the service was too restrictive. Only Windows format, and only on one computer, with no burning? It would have been a miracle if it had survived.

As Ian Rogers of Yahoo Music said in his recent call to arms for online music, “inconvenience doesn’t scale.” Wal-Mart is the size of a Latin American country in terms of revenues ($370-billion) and population (it has 2 million employees), not to mention market capitalization ($200-billion), but it still can’t make something as crippled as its movie service was popular by brute force.

Wal-Mart’s massive size might have helped it get deals with the studios for their content, but it apparently didn’t help the retailer pressure said studios into giving up the handcuffs they like to place on that content — either Wal-Mart wasn’t able to convince them, or it didn’t try hard enough. Let’s hope the failure of its service doesn’t convince others that it wasn’t worth it to even try; Wal-Mart’s effort was doomed from the start.

Great quote from Jack Warner, founder of Warner Brothers, which I found on Marc Andreessen’s excellent blog (a blog I wish he had more time for). Warner was talking about movies, but I think — and I assume Marc agrees — that it applies to all kinds of things:

“Every worthwhile contribution to the advancement of motion pictures has been made over a howl of protest from the standpatters, whose favorite refrain has been, ‘You can’t do that.’ And when we hear that chorus now, we know we must be on the right track.”

The quote comes from Neal Gabler’s book An Empire of Their Own, about the rise of the Hollywood studios.

I didn’t get a chance to write about Marc Andreessen’s recent post related to the writers’ strike, in which he argued that Hollywood needs to become more like Silicon Valley — i.e., more entrepreneurial — but it certainly got me thinking. And now I get to write about it anyway, because an article in the Los Angeles Times effectively reproduces Marc’s argument, comparing the small, entrepreneur-driven approach of the Valley to the indie filmmaker or writer-director whose movie makes it big at the box office.

Patrick Goldstein of the Times makes a persuasive case for how some of the best movies come from independent filmmakers or writers, who are consumed by a dream and find any way they can to make it happen, and how some of those people go on to become Steven Spielberg or George Lucas. And then just when I was feeling all rosy about the whole thing, Steve Bryant of Reel Pop comes along and dashes some cold water on Goldstein’s argument, saying the odds of that happening to a struggling filmmaker or writer are astronomical.

Steve’s point is that marketing your great idea is the one thing that stands in the way of an entrepreneurial would-be filmmaker and glory, and that simply uploading a clip of your film to YouTube isn’t going to be enough to stand out from the mass of dreck that gets spewed out of Hollywood on the average day. And he is probably right.

I would still like to hope (and I think Steve would too) that sheer grit and determination can get you a long way — and there’s no question that the Web has lowered the barriers to being discovered or finding support. But it hasn’t removed them entirely. In other words, being lucky is probably still the best tool you can have in your arsenal.