YouTube, always on the look-out for ways to solidify its leadership in video and increase its revenue has been in negotiations with the major movie studios to start streaming movies on a rental basis. Granted there are already some full length movies available on the service but they are generally lesser known movies or indie films looking for exposure.
This latest move is seen as a way to increase their revenue as well as one of its first moves towards charging for content instead of going with the typical ad supported model. At this point YouTube is in discussions with: Lions Gate, Sony, and Warner Bros. about including their movies in YouTube’s site. Additionally part of the talks include making them available on the same day the the movie’s DVD comes out.
Many of the details involved with the ongoing discussions are still in a state of flux. Included is whether or not at some point users will be able to download the movies. The figure being tossed around for the rental is $3.99 with the possibility of the traditional ad supported model being used for some of the movies. As it is the movie studios already get a 70% share of revenue generated by movies already on the site and the word is that this would be the same for the new movies being streamed.
In addition the studios would be guaranteed a minimum fee of just under $3.00 per title viewed. The thinking behind this is that since it is a flat fee the studios would get regardless it give YouTube some wiggle room to offer special deals.
At this point 10,000 Google employees are set to begin testing the service at some point after September, which was the original date for the internal testing launch; but that has been set back as negotiations drag on.
hat tip to WSJ.com http://online.wsj.com/article/SB125192241524880801.html
