Youtube to rent movies online from Friday

The new service is an endeavor towards boosting the profits earned from the site.

During the initial testing phase only five films will be made available for rental purpose.

And reportedly, the five films selected for the launch of the service have been selected from the 2009 and 2010 Sundance Film Festival that is currently on till Jan. 31 at Park City in Utah.

Mike McGuire, the head analyst at Gartner Research, says, “This is a huge move for YouTube in the sense of them trying to monetize the site. This certainly opens the door for them with bigger movie studios.”

“Content is king in this kind of business and Sundance is a good first step. Negotiating with the major studios over distribution rights however is not for the faint hearted. Google has to perfect its delivery model and its billing system,” he adds.

The ‘pay-per-view’ scheme
The Sundance movies are just a starting point for the pay-per-view project, and Google is gearing up to make other TV shows and movies from Hollywood studios inclusive in the plan later on.

“In the coming weeks we'll also invite a small group of partners across other industries, in addition to independent film, to participate in this new option,” affirms a company spokesman.

Reports are also on about YouTube’s talks on getting exclusive ‘pay per view’ streaming rights for films and television shows. Also, under the new venture, the content providers will be able to set their own revenue with some percentage going to YouTube.

About the Rental Movies
Under the scheme, the movies will be available for rent at a fee of 3.99 dollar each with a 48-hour viewing time and ‘The Cove’, ‘Bass Ackwards’, ‘One Too Many Mornings’, ‘Homewrecker’ and ‘Children of Invention’ are the movies that will be available for rent.

YouTube already offers full-length films from Metro-Goldwyn-Mayer's archives for its users and it hopes to get bigger films from studios all over the world, to expand its reach and fight competitors.

Persuading studios was hard for YouTube
According to sources, YouTube had a hard time in persuading Hollywood studios in giving it the streaming rights of their blockbusters and latest releases.

The majority of Hollywood studios have uploaded their content on other video-sharing websites like Hulu which is jointly run by NBC Universal, News Corp and Walt Disney.

The new scheme being started by YouTube can bring tough times for other companies like Apple's iTunes store, Amazon.com and Microsoft's XBox Live.