Web channel wins contract to screen Paramount films in the US and Canada, while UK service blinkbox signs deal with Disney

YouTube has reached a deal to screen films from Paramount Pictures in the US and Canada, meaning the web channel now has agreements with all six major Hollywood studios bar Twentieth Century Fox.

The contract means users of the channel will be able to stream more than 9,000 Paramount titles including Hugo, the Transformers films and classics such as The Godfather. The deal comes on the same day as UK service blinkbox announced that it has reached an agreement with Disney to screen the studio's films. The channel is seen as a competitor to services such as Netflix and LoveFilm, along with YouTube, in Britain.

"Paramount Pictures is one of the biggest movie studios on the planet," YouTube's Malik Ducard, said in a statement to the LA Times. "We're thrilled to bring nearly 500 of their movies in the US and Canada on YouTube and Google Play."

YouTube also has agreements with Sony Pictures Entertainment, Warner Bros, Universal Pictures and Walt Disney Studios in North America. The deal with Paramount is all the more remarkable because of the studio's attempt last October to revive a long-standing $1bn legal battle with YouTube over allegedly unauthorised clips from TV shows shown on the website. No verdict has yet been delivered in the case.

Where once it was eyed suspiciously by the film industry, YouTube has increasingly been seen as a potential business partner for studios looking to increase revenue from streaming services, in stark contrast with file sharing sites such as Megaupload. The Hong Kong-based company's founder Kim Dotcom was recently bailed by a New Zealand judge who is set to hear court arguments that he should be extradited to the US on charges of facilitating millions of illegal downloads through his site.

Meanwhile, YouTube has launched its own short film festival, the winners of which will be sent to the Venice film festival to compete for a $500,000 prize. The move is part of the site's efforts to rebrand itself as the No 1 destination for video on demand in a rapidly developing marketplace.

YouTube launched its US movie rental service in May along with more than 100 original channels, including a $10m co-branded channel with Disney. The British service followed in October and the site has already signed UK-specific deals with Sony, Warner Bros, Universal and Lionsgate.

blinkbox says it now has more than 10,000 films from existing partnerships with all the major studios, including Warner Bros, Paramount, Sony, 20th Century Fox and Universal, in the UK. The channel boasts that these are available to stream without subscription, in contrast with some of its rivals' services. The firm's co-founder and CEO, Michael Comish, said: "At blinkbox, we focus on the highest-quality movie experience with all the latest titles available for our customers to enjoy anytime, anywhere without being tied into a subscription."

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