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YouTube may offer film rentals soon

YouTube may offer film rentals soon

By Broks Barnes, New York Times | Updated: 5 June 2012 02:11 IST

Highlights

A two-year effort by YouTube, owned by Google, to get major Hollywood studios to offer their new-release movies for rental is coming closer to reality.

A two-year effort by YouTube, owned by Google, to get major Hollywood studios to offer their new-release movies for rental is coming closer to reality.

Sony Pictures Entertainment, Universal Pictures and Warner Brothers have agreed to rent movies via YouTube, according to two studio executives who spoke on condition of anonymity because they said YouTube wanted to make the announcement. Rental fees are expected to be comparable to those charged by rivals like iTunes.

YouTube, however, has only half of the industry's top players on board. Still on the sidelines are Walt Disney Studios, which is closely aligned with Apple, and 20th Century Fox and Paramount Pictures. Paramount's corporate owner, Viacom, is still battling YouTube in court over copyright infringement. These three studios together control about 60 percent of the North American movie market.

YouTube declined to comment on reports of new rental deals. "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," said YouTube in a statement.

Lionsgate Entertainment, the Weinstein Company and independent filmmakers already make films available for rent on the site for $2 to $4, including "Scary Movie 4," "3:10 to Yuma" and "Saw."

But the arrival of bigger Sony, Universal and Warner movies would give the streaming service a shot in the arm as it tries to compete with Apple's iTunes, Amazon.com and Netflix. YouTube has been trying several strategies to keep people on the site for longer periods as it tries to poach viewers from TV and attract ad dollars.

Despite YouTube's popularity -- people view videos on the site two billion times a day -- its film rentals do not appear to have gained much traction.

Still, YouTube offers movie studios more than just viewers, said James L. McQuivey, a digital media analyst at Forrester Research. Google can provide valuable data on how many people have searched for movies and which terms they used to search.

"That's just a marketing chain of cause and effect that nobody else asking movie studios for rights to rentals can show," Mr. McQuivey said. "You don't necessarily need to show that a rental has been blockbuster successful to show a movie studio that it's an avenue worth pursuing."

Studios have repeatedly said that their digital strategies involve making on-demand deals with as many legitimate Web sites as they can -- reflecting lessons learned from the music industry's attempt to shut down digital consumption. They are also eager to replace dwindling DVD revenue. The latest rental plans were first reported by TheWrap.com, a movie industry blog.

But the chill between YouTube and Hollywood has taken time to ease. During its first few years, YouTube stood behind the Digital Millennium Copyright Act and told media companies it was not legally required to remove unauthorized material from its site unless specifically asked to do so by the owner. The stance provoked a $1 billion lawsuit from Viacom and broad animosity from media executives.

The willingness of mainstream studios like Sony, Universal and Warner to finally play ball reflects the work YouTube has done to make its portal look less like an online video garage sale. The site has also made it easier for media companies to take down pirated video content. It does not hurt that a New York federal judge last year sided with YouTube in the Viacom lawsuit; Viacom has since appealed.

"The fact that there's still a few studios holding out on Google just goes to show you that even though this is an obvious no-brainer decision, the fear of Google still rests heavily on people's minds," Mr. McQuivey said. "But eventually they'll all be there because why on earth would you refuse to put your content in the path of millions of users?"

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