YouTube Mulls Movie Rentals

YouTube is great for taking short breaks at work or watching your friend's toddler smear spaghetti sauce all over her face; but free, user-generated content has a way of lowering expectations. If it cost anything, we'd demand more.

That begs the question: Does YouTube make money?  Yes, according to several market researchers, but not enough to cover the costs of streaming all of that video and maintaining the server space to store it all. It probably doesn't really matter since it's owned by deep-pocketed Google, but I'm sure they'd like to cash in on its popularity somehow.

According to an article (subscription required) in the Wall Street Journal, YouTube is schmoozing with several major movie studios (Lions Gate, Sony, MGM and Time Warner) with hopes of streaming feature films on a rental basis. It would be good for the studios, the article points out, since they've been struggling with declining DVD sales lately.

The plan is to release feature films on YouTube at the same they're released on DVD, charging roughly $3.99 to rent it online, according to sources cited in the article, which is comparable to what Apple charges for film downloads. YouTube officially hasn't said much about its plans and only offered WSJ reporters a bland response about how it wants to expand its "great relationships with movie studios."

It may take a while to catch on, but I'll bet the cable and satellite TV executives are sweating bullets these days.

Image courtesy of YouTube