/ 27 April 2011

YouTube to launch movie rental service

YouTube is launching a movie rental service in a partnership with Hollywood film giants including Sony and Warner Brothers, to rival Netflix and Apple’s iTunes.

The world’s most popular short-form video website will expand into streaming big-name, full-length blockbusters in May, according to reports. Under the premium movie-on-demand service, film lovers will be able to stream new releases for as little as $2, though prices will differ for each movie.

Three of the six major film studios — Sony Pictures Entertainment, Warner Brothers and Universal — have reportedly agreed licensing terms with the Google-owned video giant. Paramount, Fox and Disney have not yet committed to the plan, it is understood. The service is expected to be limited to the United States for the foreseeable future.

A spokesperson for YouTube declined to comment.

Google has strengthened its relationship with Hollywood and programme makers in recent months in an attempt to keep up with competitors, including the market-leading Netflix and iTunes.

In the US, Netflix dominates the nascent online movie streaming market. With 23,6-million subscribers, the US-only site now commands as many eyeballs as Comcast, the largest cable operator in the US. Apple’s iTunes, meanwhile, offers a formidable roster of new releases to download and to rent virtually.

Despite a low-key foray into independent movie-streaming — announced at the Sundance film festival in January 2010 — YouTube has yet to offer any big-name titles. The site’s global reach, attracting more than 100-million users around the world, is understood to have complicated negotiations with film studios, which usually sign licensing agreements on a country-by-country basis. The deal has been further complicated by existing partnerships between Hollywood studios and streaming services including Netflix.

YouTube has signed up a number of high-profile media executives, including former Netflix boss Robert Kyncl, in recent months as the site tries to move away from its user-generated video image. Two Paramount executives, Alex Carloss and Malik Ducard, have also joined YouTube recently, along with the Universal Sports chief Claude Ruibal.

Kyncl, now YouTube’s vice-president of TV and film entertainment, hinted at the movie-on-demand plan at a conference earlier this month. “Imagine if you had a video store on YouTube, where you could rent or buy the movie without being sent elsewhere,” he said. “Obviously, there are things coming, but we can’t talk about them yet.”

YouTube, which was bought for $1,6bn by Google in 2006, generated about $544m in revenue last year and is thought to have recently become profitable. — guardian.co.uk