YouTube to enter rental movies on demand business

Sounds like Google has found the best way to monetize YouTube yet, and it puts itself in a pretty competitive spot versus the likes of Netflix, Amazon VOD, and Apple's iTunes movie store. According to Wall Street Journal, the company is currently in talks with Lions Gate, Sony, and Warner Bros. studios over putting their content on YouTube for a rental fee, likely $3.99 (the same price as Apple's SD movie rentals). Even more interesting is talk of getting some titles online day and date with the DVD releases. Some options could still be free with advertising, but as for paid content, Google's enticing studios over to their way of thinking with a proposed minimum fee of "just under $3 per title viewed." A three-month beta testing is scheduled to begin soon among 10,000 Google employees.

Now it is finally clear why Google spent $106 million in stock on August 5 to buy On2, a maker of audio and video compression software. On2 powers YouTube's so-called High Quality or HQ service.

With Google presently under some earnings pressure and internet advertising flat, the company has to enter new markets with new services to gain new profit centers. It happens all the time in more mature companies.

Comments

[Fanfoot]

Cool. Anything to move this market forward honestly. More competition good.

I don't rent DVDs at all anymore. I watch what is available on my Apple TV or Amazon's VOD via a Tivo HD. If it isn't available there I DON'T WATCH IT. Despite the fact that content available is still way less than stellar.

I'm personally not interested in watching movies online on a laptop very often, so this needs to be tied to SOME kind of STB, for example Tivo, Roku, something. And no, I'm not going to buy a new TV to get this, get real.

But if this increases the distribution and thus the content available for online streaming/download, the more the better.

[Garth]

Do I get a prize for know this is the opening scene of George A. Romero's "Night of the Living Dead"?

[CaramelZappa]

Not when it says night of the living dead and clearly shows it's in the beginning of the movie. Better luck next time.

[Team Louish]

I still think $3.99 is too much. Even on my Dish Network, I never buy the Pay per view stuff. I think they would sell more if they charged $0.99. I wouldn't think twice about buying a movie to watch for 1 day for $0.99, but $3.99, I know I wouldn't buy it.

Just my 2 cents.

[k.joy73]

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[rental equipment]

I don't think a "rent movie" move of youtube will click! Let itunes do that.

-James