YouTube In Talks to Stream Movie Rentals

Web giant has had early conversations with Lionsgate, Sony, Warner Bros.

Last Updated: November 30, 2009 @ 3:36 PM

YouTube may soon allow its users to stream movies for rental instead of purchase, charging for content instead of making it readily available for free but with advertising.

According to the Wall Street Journal, YouTube is in talks with Lionsgate, Sony and Warner Bros. about bringing newer releases onto the site for a rental charge estimated to be about $3.99 — the price of a movie rental on iTunes. Some movies would be available for free but with advertising, and it remains to be seen if users will be able to download movies.

Though it’s not clear how many older movies or TV shows will be included in the deal, some films may be available on the video site on the same day as their DVD release.

Should the deal come to term, it could help YouTube — which doesn’t currently make a profit — to bring in some much-needed cash. It would also boost the revenue of studios, which are seeing steep declines in DVD sales.

YouTube said it is constantly seeking to expand on "its great relationships with movie studios and on the selection and types of videos we offer our community," a spokesperson for the company said in a statement released to the paper.

Currently, studios get about 70% of revenue for ad-supported content offered on the site, a percentage that would likely be offered for new movies as well. In addition, a guarantee of a minimum fee of just under $3 per title viewed could be included in the deal to make sure studios take home a profit even if YouTube offers the films for less.

The service is soon slated to be tested for three months by 10,000 Google employees.