Google to rent movies through YouTube
SAN FRANCISCO — Google Inc., which has dabbled with different ways of turning YouTube into a serious money-maker since acquiring it in 2006, said Wednesday it will begin making a limited number of films available for rental through the video service.
Google said in a posting on a company Web site that it will make five films from the 2009 and 2010 Sundance Film festivals available for rent for U.S. users starting Jan. 22, and lasting through Jan. 31.
"In addition to these five films, a small collection of rental videos from other U.S. partners across different industries, including health and education, will be made available in the weeks ahead," Google said.
The Mountain View, Calif.-based company has experimented with a variety of advertising formats for YouTube over the years, though it said Wednesday that an advertising-based model doesn't make sense for everyone.
"While YouTube has offered an easy and economical way for filmmakers — as well as content creators of all kinds — to instantaneously connect with fans around the world, many of them have told us that the ad-supported business model doesn't always meet their distribution and monetization needs," Google said.
The company said it will invite "a small group of partners across other industries" to participate in its film-rental business in the coming weeks.
Google said the films will be available for rental through its Google Checkout payment service, though it did not disclose specific rental fees.
Google does not disclose the amount of revenue being made through YouTube, though the company has said recently that it anticipates that it will become profitable soon.
In a recent research note, Barclays Capital analyst Douglas Anmuth estimated that YouTube will become profitable sometime this year, and will generate roughly $700 million in revenue — which would mark a 55 percent gain from 2009.
If Google expands its movie-rental service, it could put it in direct competition with companies such as Netflix Inc., Amazon.com Inc. and Apple Inc.
While Netflix pioneered the model of mailing video rentals to subscribers' homes, it has also begun making many films available for viewing instantly over an Internet connection.
Amazon, too, offers instant rental over the Internet at $3.99 per 24 hours.
And Apple makes films available for rental through its iTunes store.