YouTube meets with studios to gain online video access
— -- Millions go to YouTube every day to watch funny animal clips and other videos online, but would they pay good money to watch a movie?
That's what YouTube wants to find out.
The company is meeting with Hollywood studios, trying to encourage them to sign contracts that would allow it to rent recent movies to consumers, according to a person with direct knowledge of YouTube's plans who was not authorized to speak publicly because the talks are ongoing.
YouTube wouldn't be the first site to offer online film rentals. Apple, Amazon and Roxio CinemaNow all offer rentals, and the results so far have "dramatically underperformed," says James McQuivey, an analyst at Forrester Research.
Even with its huge traffic, YouTube isn't profitable, although Google says that will happen soon.
McQuivey doesn't see millions of people forking over $3.99 or so to rent a movie on YouTube in the near term. But he says it needs to position itself as sales start to take off for Internet-connected TVs and Blu-ray players.
"If YouTube is going to compete with Samsung and LG, they've got to do something now," he says.
YouTube now offers some films for free on its site. Most are little-known, independent films. But a recent experiment with comedy classic Ghostbusters attracted nearly 700,000 views in less than a week.
McQuivey estimates that Apple has brought in over $50 million renting and selling feature films at its iTunes store. But that's in "a market measured by billions."
If YouTube begins to offer rentals, "It doesn't have any worse chances than anyone else," he says. But, "If you're willing to pay to watch the movie, why watch it in low resolution on the small screen?"
