YouTube Flirts with Expanded Movie Rental Service

Paul Lilly

Google is ready to take the next step with YouTube and will launch an on-demand video rental service in which viewers will be able to stream Hollywood flicks, according to reports. The service could launch as early as next week, providing instant competition to Netflix and Apple's iTunes, and give Hollywood studios yet another revenue stream.

According to , major studios including Sony, Warner Brothers, and Universal are on board with the idea and have licensed their movies to YouTube, and so have a number of independent studios, one of the bigger ones being Lionsgate.

It's unclear how much YouTube would charge per flick, though it would probably vary by movie. But whatever the cost, the end result is that 130 million monthly users would have the option of paying to watch movies as they're released. The question is, will this really happen?

"We've steadily been adding more and more titles since launching movies for rent on YouTube over a year ago, and now have thousands of titles available," a YouTube spokesperson told TheWrap. "Outside of that, we don't comment on rumor or speculation."

Maybe YouTube isn't willing to address rumors or speculation, but at least one un-named studio head is.

"We think it will start with VOD, but broaden to include sell-through over time," TheWrap quotes a senior executive at a Hollywood studio that has signed the new deal with YouTube as saying. "We are pretty excited because we are happy to see new entrants come in transactionally rather than a subscription model."

Google recently announced it was shutting down its Google Videos servers and is in the process of migrating user uploaded videos over to YouTube, which the sultan of search purchased back in October 2006 for $1.65 billion.

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