YouTube plans movie rental service for May launch

26 Apr 2011

Online video giant YouTube may launch a blockbuster movie rental service as early as May, in partnership with Hollywood giants Sony and Warner Brothers.

Rumours are gaining pace that the service, which will rival Netflix and iTunes, will allow users to stream movie releases for US$2 per movie.

According to reports, Sony, Warner and Universal have signed licensing deals with Google-owned YouTube.

However, other studios, including Disney, Paramount and Fox, have not yet signed agreements with the online giant.

It is understood the service will be confined to the US. Earlier reports suggested YouTube planned to start in Europe first.

A recent acquisition spree by YouTube suggests it wants to shake free of its user-generated content image and instead embrace a new existence as a home for high-quality films and even its own TV channels.

The future of YouTube

Last year, YouTube began an experiment in streaming live TV, which was a key indicator to where the site sees its future.

YouTube believes the point of convergence between TV and the internet has been reached and the site is prepared to compete with broadcast and cable TV.

In recent weeks, it emerged YouTube is planning to introduce 20 channels that will feature several hours of professionally produced, original programming.

The video site is to spend more than US$100m to produce low-cost content designed exclusively for the web.

In recent weeks, YouTube acquired Dublin-based video technology company Green Parrot Pictures for an undisclosed sum. Green Parrot Pictures specialises in delivering intellectual licensing and high-quality picture-manipulation technology. Anil Kokaram, an associate professor at Trinity College, founded the company in 2004.

The acquisition of Green Parrot came a fortnight after YouTube bought Next New Networks for US$50m. Next New Networks, which attracts 2bn views a month, produces original programmes and helps content creators distribute films and make money.

YouTube also said it was expanding its staff by 30pc, taking on 200 extra people, and revealed its staff now includes aspiring filmmakers, musicians, activists and documentary makers.

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years

editorial@siliconrepublic.com