YouTube plotting film rental service

 

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By Reuters

Posted on 3 Sep 2009 at 08:18

YouTube is in talks with film studios to open a new rental service, allowing users to stream movies over the internet.

YouTube is in discussions with Lions Gate, Sony Pictures and Warner Brothers about starting a rental system similar to that of Apple's iTunes service. If the talks come to fruition, it would mark the first time the world's most popular video-sharing site would charge its users to watch videos.

However, YouTube was typically cagey about the deal commenting only that "we hope to expand on both our great relationship with the movie studios and the selection and types of videos we offer our community."

The service currently offers a range of archive movies, television shows and promotional clips from the three studios, all supported by advertising.

YouTube is in the midst of talks and negotiations with a wide range of media content partners as it ramps up efforts to build a substantial library of current and archive professional movies and videos that it can monetise.

Advertisers are believed to favor professionally made videos over those of users. Hulu, a video site owned by News Corp, Walt Disney Co and NBC Universal, has had relative success attracting both users and advertisers with a range of full-length TV shows and older movies.

Last month, YouTube announced a partnership with Time Warner Inc properties including CNN and TNT. It agreed a similar deal in March with Walt Disney.

YouTube owner Google has come under growing criticism from Wall Street analysts and investors concerned the expense of serving millions of videos to users around the world everyday is costing the company more money than it earns from advertising.