TDGI: Google To Rent Movie Streams Online
Keeping up with the times and trying to stem its losses, YouTube is in discussions with major movie studios about allowing its viewers to stream movies on a rental basis. So says the Wall Street Journal.
Google who have been tinkering with the Youtube model for months trying to wring out some profit are now trying to persuade its millions of users that paying for premium streams could be a good idea.
youtube movies Google To Rent Movie Streams OnlineOn the other side over in Hollywood, this development could help stem the tide of shrinking DVD sales and topping up the loss with online revenue.Currently a few studios are streaming smaller and older movies via YouTube. But now YouTube is in discussions with Lions Gate, Sony and Warner Bros about streaming brand new movies. It has been suggested the streams may be available on the same day as the dvd release.
Details are still scarce on the rental agreements, would users be able to download the movies for instance or just view once? It is believed that the movie streams will be priced around $3.99, the same as Apple iTunes Store charges for new movie rentals.
Other companies that let users stream or download newer movies include Apple, Amazon.com and Netflix, while Sony’s Crackle and Hulu allow users to watch older full-length movies online for free.
In a statement, a YouTube spokesman said the company is always working to expand on “its great relationships with movie studios and on the selection and types of videos we offer our community.”
The talks are a sign of how YouTube is emerging as a competitor to a broad spectrum of entertainment outlets, including Blockbuster and Netflix as well as iTunes and Amazon. The Hulu LLC joint venture and Sony’s Crackle allow users to watch full length movies free, but don’t generally include new releases. Hulu is a joint venture of General Electric Co.’s NBC Universal, News Corp. and Walt Disney Co.
YouTube began as a collection of funny and home made videos, but it has become increasingly proactive in making deals to host tv shows and movies as a means of attracting advertisers and viewers. But movie studios and TV networks won’t give up their most popular content for a share of advertising, which they complain isn’t sufficient. The negotiations with the studios are part of an effort to open up new revenue streams by charging users themselves.
Hollywood has also been eager to distribute more of its films online — as long as it can collect a reasonable fee. Though many studios now sell and rent movies online through services such as iTunes and Amazon.com, that has yet to produce meaningful revenue. By cutting a deal with YouTube, which had nearly 428 million global visitors in June, according to comScore, it can potentially reach a much wider audience.
Studios have been pursuing these kinds of deals with renewed urgency, as revenue from DVD sales has eroded more quickly than they had anticipated. Adams Media Research says studio revenue from DVD sales should fall by about $850 million this year to $12.9 billion.
YouTube’s army of watchers are not used to paying a penny to watch videos. Shorts and the currently available full length movies are free and the number of users watching full length has been modest as users are not accustomed to watching 90 minutes plus of solid content from their pc screen.
The parties involved are still negotiating how to split revenues from the new deal, YouTube is thought likely to give partners the majority of the revenue, as it has done with other setups previously. Some deals may also guarantee the studio a minimum fee per title viewed, in some cases just under $3, according to reports.
YouTube also wants users to stream movies on mobile devices, but some of the studios are not playing ball, which is strange as iTunes allows this with rentals. It is reported that 10000 Google employees will use the service as a test over three months.
Of course online tv fans want a collection of good free content. Internet connected tv sales are rising and viewers are prepared to pay for premium streams which Youtube obviously know.
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