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YouTube working on a deal to rent movies to visitors

Google paid a premium for video streaming site YouTube and so far by Google's own admission, the website has failed to live up to its profit potential. YouTube continues to be the poster child for a site with an immense amount of traffic and little revenue.

Some reports have YouTube losing significant sums of money, though exactly how much money the video site loses is unconfirmed. YouTube is always on the lookout for new methods to monetize its video consuming users and recently unveiled a plan that would allow it to place ads on one-off videos and share the revenue with the video producer.

BusinessWeek reports that YouTube is now in early talks with some major movie studios on a plan that would have the video site renting movies to visitors for $3.95. That is the same costs that Apple rents movies for on its rental service and if the deal comes to fruition it would put YouTube in direct competition with Netflix and Amazon.

The talks with YouTube reportedly began with Warner Bros and led initially to agreements to allow more clips from Warner TV shows like Gossip Girl to be viewed on YouTube. Warner has not allowed YouTube to show full episodes of its programs to date. Reports also have YouTube in talks with Lions Gate and Sony about streaming movie rentals. Two of the major Hollywood studios are not believed to be part of negotiations at this point -- Walt Disney and Fox.

There is long standing bad blood between YouTube and Viacom that stems from Viacom's assertion that YouTube looked the other way as portions of pirated shows were viewed on YouTube. The pirated content has Viacom and YouTube working their way towards a court date with the outcome being a $1 billion damage claim.

BusinessWeek reports that with DVD sales declining, a deal with Viacom could happen. However, a source cited by the publication said, "They had better be prepared to write Viacom a big check if they think that's going to happen. There is very bad blood between those two."



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Renting a movie for $4
By HrilL on 9/3/2009 12:53:40 PM , Rating: 3
That price seems too steep for online renting. I remember renting VHS movies back in the day for $2 and if the local rental store could make money with a lot more overhead cost then I don't see why we should be paying $4 a movie when its going to cost them maybe 3 cents. I don't see why these companies believe that infinite goods should cost the same as finite ones. The cost of distribution is lower so the price should be lower. I'm all for companies making a profit but within reason. Its not right to make a 300% profit increase and not pass some of the savings onto the consumer.




RE: Renting a movie for $4
By FITCamaro on 9/3/2009 2:42:38 PM , Rating: 3
Back in the day $2 was worth something.


RE: Renting a movie for $4
By FITCamaro on 9/3/2009 2:44:52 PM , Rating: 2
quote:
I don't see why these companies believe that infinite goods should cost the same as finite ones. The cost of distribution is lower so the price should be lower. I'm all for companies making a profit but within reason. Its not right to make a 300% profit increase and not pass some of the savings onto the consumer.


This is all up to the consumer to decide. There is nothing morally wrong about making a profit, no matter how large.


"I'm an Internet expert too. It's all right to wire the industrial zone only, but there are many problems if other regions of the North are wired." -- North Korean Supreme Commander Kim Jong-il

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