YouTube May Enter Movie-Rental Business

YouTube is reportedly in talks with major Hollywood studios to offer new-release feature films for rent on their site. If the deal goes through, the site would offer streaming movies for a per-viewing rental fee.

Similar services are available from iTunes, Amazon and CinemaNow. But the move is a departure from the ad-based model of business for YouTube (a subsidiary of Google). And the talks may signal shift from user-generated content. For now, it appears that much-beloved gems like musical mash-ups and web-only music videos will not be adversely affected.

Anonymous YouTube sources have reported that the final deals with studios are contingent on pricing and agreed-upon release dates. Studios closest to finalizing this deal are reportedly Lionsgate, Sony, and Warner Brothers. All of these companies already have limited revenue-sharing deals with YouTube, allowing it to stream selected older movies, TV shows and trailers.

Since Oct. 2008, DVD rental company Netflix has offered some films and TV shows streaming to TVs and PCs, and ad-based, NBC-owned Hulu offers all its content (older films and selected TV programs) free to users. As other streaming-video sites enter the marketplace, these pending film deals may allow YouTube to stay ahead of the pack.

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