• by Gavin O'Malley  @mp_gavin, February 13, 2007

Amid ongoing tension with content owners about piracy, Google's YouTube has struck a deal with online distributor Digital Music Group to carry kitschy TV classics like "Gumby," "My Favorite Martian," and "I Spy" free of charge for viewers.

"Gumby" has some big shoes to fill following Viacom's insistence last week that YouTube take down over 100,000 Viacom-owned videos, including any trace of Jon Stewart and Stephen Colbert.

Although YouTube's future rests in large part on relationships with top-tier media companies, satisfying niche audiences--like "Gumby" fans--can't hurt, said Jupiter analyst Kevin Heisler. "Despite all the talk of the long tail, nothing can replace the hits generated by the major media companies," said Heisler. "You need both." Still, he added: "There's a large, older, nostalgic crowd for this stuff."

YouTube plans to show ads on the pages where the videos will run, and will share the ad revenue with Digital Music Group.

The new deal gives YouTube uploaders the additional benefit of legally being able to score their videos with music owned by Digital Music Group. The company presently owns publishing and/or distribution rights to over 40,000 music recordings, and over 4,000 hours of video content, including television shows and films.

Digital Music, which can expect a share of revenue from the ads accompanying its content, will also receive reports from YouTube showing exactly when third-party videos are using Digital Music's catalog as background music.

"Not only is YouTube helping to promote independently owned content, but will also provide a new revenue source for DMGI through online advertising," Mitchell Koulouris, CEO of DMGI, said in a statement.

Last year, YouTube signed similar deals with music companies, including Sony BMG Music Entertainment, Universal Music Group, and Warner Music Group, which allow consumers to use portions of the labels' music libraries to accompany video on YouTube.

Google's YouTube isn't the first content portal to test old TV shows at a time when content--any content--is in high demand online. Last March, AOL launched its In2TV platform for free Warner Bros. TV shows from "F-Troop" to "Welcome Back Kotter."

Although the company is only two years old, Digital Music has already struck partnerships with Apple's iTunes Music Store, Napster, and Wal-Mart.