YouTube Join Forces With Sundance For Online Movie Rentals

January 22, 2010 0

Mountain View, California — Google may have defined advertising with its search engine, but its online video site YouTube just jumped out in the opposite direction with the announcement that it will make movies from the 2009 and 2010 Sundance film festivals available for online rental that will generate money without relying on advertising to foot the bill.

For the first time that YouTube, world’s most favored free video-sharing website is entering into the pay-per-view business, will now charge users.

To commence with, YouTube will at first start with around five Sundance titles, as well as small assortment of videos from partners in industries such as health and education, and will be accessible to web surfers through the end of the month, YouTube said in a post on its company blog on Wednesday.

YouTube will commence testing-out an online movie rental service with independent films from the Sundance Film Festival on Friday.

Five independent movies from the Sundance Festival will be available for online rental at YouTube starting on Friday are: Bass Ackwards, Children of Invention, Homewrecker, One Too Many Mornings, and The Cove, with other video and film content to follow — initially from the health and education sectors, then from other independent filmmakers.

All the titles were selected from the 2009 and 2010 film festivals. Besides these films, some other videos will be available in the weeks to come, and YouTube is looking for more independent filmmakers, according to CNN.

“Anything that contributes more content to the YouTube community is a good thing,” the company posted on its blog. “And making content available for rent will give our partners unprecedented control over the distribution of their work.”

Offering a rental service is a clear sign that Google, which has been striving to make a profitable business out of YouTube after purchasing it in 2006 for $1.65 billion, is looking for novel ways to monetize the service. Luring advertisers to YouTube has been difficult because they have shied away from some of the content uploaded by users.

YouTube spokesman Chris Dale said the service could possibly be expanded to eventually include recently released films from the major Hollywood studios, though he would not say whether the company has had discussions with the studios about such an offering.

Allen Weiner, an analyst at IT research firm Gartner in Scottsdale, Arizona, blogged that YouTube’s move into the business of online movie rentals was a natural progression for the site. Over time, he said, YouTube may even start to distribute rentals to Apple TV, PS3 and Wii. “Google’s media strategy is geared to take dead aim at Apple,” said Weiner.

The Sundance movies are just an introduction for a much more ambitious pay-per-view venture, said people familiar with YouTube’s plans, who spoke on condition of anonymity because they were not authorized to discuss the matter.

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Under terms being discussed, the studios would set the price of the rental and YouTube would share in the revenue. Most of the Sundance films are being offered for $3.99 each, to be viewed during a 48-hour period.

Starting Friday, anyone with a Google Checkout account will be able to rent these films for whatever price and time period the content owner chooses. For example, The Cove and One Too Many Mornings will both cost $4; the former will be available for 24 hours, the latter for 72 hours.

Dale said filmmakers participating in the new online rental program could charge web surfers between 99 cents and $19.99 to rent movies, which could be available to users for a period of 24 hours to a maximum of 90 days.

Offering pay-per-view movies and TV shows will put YouTube up against competitors like Apple’s iTunes Store and Amazon.com. However, YouTube has the advantage of a huge audience that comes to its site for free videos. It streamed more than 12 billion videos in November, according to comScore.

Partners in the new program will keep the majority of the revenue generated from film rentals, Dale said.

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