April 26, 2011

YouTube to Contend with iTunes in Movie Rental Biz

The place we normally go to for viral video viewing is moving things along into another business venture. YouTube (News - Alert) is apparently launching a movie-on-demand service, rivaling that of iTunes and Netflix, and it will feature some big studio licenses.

According to The Wrap, Sony Pictures Entertainment, Warner Brothers and Universal have given their blessing to license their movies where as Paramount, Fox and Disney (News - Alert) have not yet committed to the plan.. The service is expected to be limited to the U.S. for the foreseeable future.

YouTube has signed up a number of high-profile media executives, including former Netflix boss Robert Kyncl, in recent months as the site is moving away from its user-generated video image.

Kyncl, now YouTube's vice-president of TV and film entertainment, hinted at the movie-on-demand plan at a conference earlier this month. “Imagine if you had a video store on YouTube, where you could rent or buy the movie without being sent elsewhere,” he said. “Obviously, there are things coming, but we can't talk about them yet.”

If the service launches, Google (News - Alert) will most likely look into integrating it with Android. Currently, a YouTube application already comes preloaded on most Android devices, which allows Android (News - Alert) smartphone and tablet owners to view free user-generated content. Google doesn’t yet have a native movie, video or music store although the company had recently integrated Google Books purchases with the Android Market app store for Android 3.0 Honeycomb devices like the Xoom.

A Hacker News member has found a cached copy of the new YouTube Store that will replace YouTube’s current rental store with the introduction of first-run new movies. But if this cached copy of the new YouTube Store featuring those major studio movies is anything to go by, it appears YouTube will be introducing a new store or relaunch of the existing one aside a large new library of content.

This deal puts Google in direct competition with established players in the market such as Netflix, which boasts around 23 million subscribers in North America.

This news follows last week’s announcement that Tesco have bought an 80 percent stake in video-on-demand service Blinkbox as part of its own push into the home entertainment market. Richard Brasher, Tesco’s UK CEO, said the acquisition means the supermarket can “link together” the physical purchase of films and entertainment with digital technology to create a multi-channel entertainment offer.

Michelle Amodio is a TMCnet contributor. She has helped promote companies and groups in all industries, from technology to banking to professional roller derby. She holds a bachelor's degree in Writing from Endicott College and currently works in marketing, journalism, and public relations as a freelancer.

Edited by Jennifer Russell