When Google acquired YouTube in 2006 for $1.65 billion, CEO Eric Schmidt remarked, “This is the next step in the evolution of the Internet.” Three years later, YouTube is still not profitable, hosting thousands upon thousands of silly cat videos, while its primary competitor, Hulu, has already secured content syndication deals with NBC, ABC, FOX, and scores of cable networks. Ouch.
Of course, we shouldn’t be writing YouTube’s epitaph just yet. According to an article in the Wall Street Journal, YouTube is currently in discussions with a number of movie studios, including Lions Gate, Sony, MGM, and Warner Brothers, to develop some kind of movie rental agreement.
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The proposed agreement would create a system whereby YouTube users could access new movies for a standard fee of around $3.99. Users may also be able to access movies for free by agreeing to watch a few commercials during the course of the film. The move indicates Google’s strong desire to compete with the likes of Netflix (which recently began streaming select movies online instantly) and Apple iTunes.
Though YouTube has been hosting licensed content from Sony, Lions Gate, and CBS (among other media companies) since April of this year, the videos have all been of older materials. Through a rental agreement, YouTube would be able to host movies on the same day that they are released on DVD and Blu-Ray. At this point, these are just negotiations, so there’s no way to be sure exactly what movies would be available, and when.
Compared to Hulu, YouTube still brings in vastly more web traffic (billions compared to millions), making it an extremely attractive target for advertisers. What’s more, if this rental deal with Lions Gate, Sony, MGM, and Warner Brothers comes through (and if YouTube can massively improve the quality of their video streaming) there’s a chance it could be a real moneymaker.
On the other hand, who would actually be willing to pay $3.99 to watch a movie on YouTube? I don’t mind watching TV shows on Hulu, which has much better playback resolution, but I’ve never felt that the quality of YouTube was good enough to warrant watching more than a three or four minute clip.
What do you think? Would you pay $3.99 to watch a movie on YouTube? If no (and I’m betting we’ll get a lot of no’s) why? If you wouldn’t pay to watch a movie on YouTube, Would you sit through a series of commercials to watch it?
Source: Wall Street Journal, CNET
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23 Comments
Never,,, !!! ??? !!!
Oh, great, ANOTHER reason for people not to go to video stores.
What are you, trying to put me out of a job here??
@ Xigbar; Better find a new gig. The rental business is going to get slimmer for the brick and mortar crowd. The phone company is getting into the act too. The fiber isn’t to your door yet, but it is in your neighborhood!
You do realize that there is nothing technical limiting youtube’s video quality; it’s simply that most people don’t bother taking the time to maker higher resolution videos, and there IS a limit on the size/time of videos. However, if google was to offer movies, naturally, they would make it as good looking as hulu.
The commercials during a movie would end it for me. I skip all that crap on DVDs, so now way would pay to see a movie with them.
not a single mention of Netflix’s Instant Queue?
netflix has a very large library of movies & TV and a Great XBOX application so you can access that library on your computer and at home. I watch part of a movie at work during lunch and then go home and pick up the rest of it after dinner.
The Service is so good, as a matter of fact we just bought a second XBox Elite just as a Set Top Box for the Living Room (new price $299). the service tests the signal and sets the buffer appropriately. i have a 52″ LCD and the quality is outstanding. I suspect that, once their agreement gets them same day video releases to the instant queue, there will be no need to have DVD’s Mailed back and forth again.
+5 for Netflix.
Oh I Forgot.. NO Commericals!
In Youtube’s favor, I’ve had the least problems of any internet video provider in terms of reliability with it than any other I’ve come across. It never fails to load or play.
@steven the git
I was under the impression you could pay 3.99 for the movie without commercials, or choose to watch it with commercials for free, kinda like how South Park Studios does it. They can afford to offer it free because of the advertisements.
That said, if I’m wrong and it IS 3.99 plus commercials, then count me out.
Although I am surprised to hear that Youtube isn’t currently profitible, what with the billions of users.
Why should I pay YouTube $3.99 per movie, when I can get it as part of my subscription to Netflix? Granted, Netflix doesn’t make new releases available immediately, but I’m not in THAT much of a hurry to see new releases. If I am, I can go to Redbox and get the movie for a buck.
@goiliad
Can you get HD movies from Netflix instant downloads? I have a Roku box and can’t get HD, big minus for me.
Vic
^Vic, that is one of the reasons why I didn’t buy the Roku box. I do suspect, however, that in the future Netflix will have hi-def streaming. They’d be silly not to.
Of course. But what’s interesting is that via the Roku box they offer (for a fee per movie) HD streaming via Amazon.
Vic
Josh
You might be right. I did think it was being very cheeky to ask for payment and then stick ads in.
Think I’d try it for free, then judge how bad the ads were.
Even so, I prefer buying DVDs. The prices drop in no time and you get a lot of extras now.
@Josh R & steven the git
If you watched with ads, you would not have to pay. I’m sorry that wasn’t clear in the post.
@Goliad
I did mention Netflix in the third paragraph. I agree, it is awesome to stream movies live from Netflix through your XBox.
@Joe
I know that YouTube would improve the quality of premium content, but, right now, the website is synonymous with low quality amateur video. It will be hard to shake that reputation, especially when sites like Hulu and Vimeo are known for higher quality.
FYI – I added “for free” in the post for clarification.
no way u r right the video streaming is awful i can only watch 2 minute videos on there or else its not worth it. They r going to need a complete site redu if they want to have a chance at people spending money on youtube.
Disgusting how GREEDY Google is at the public’s expense. They slowly have squashed the Users to the back tab on the site.
Google took over YouTube while scouting out the Big Corp Partners like Disney and others while at the same time they stripped Users of every video they could find to reduce the User Videos (less we forget the video of the baby’s first steps that was removed for ‘copyright’ issues because of the song that was playing on the radio in the background!).
Google has from they day they took over YouTube acted to become the next HULU at the Users (that made YouTube famous) expense.
I will never give any business to YouTube after they played dirty to YouTube Users, I don’t care how big GoogleTube / HuluTube becomes! Dirty players deserve no respect or patronage.
Ah thanks.
I don’t want YouTube to go down because a lot of my favorite music videos are on there. All the same, I prefer DVDs to online streaming.
@Xigbar
I agree with TheOldMan u better change your job bro the whole internet is your down fall piracy is increasing dramaticly anybody will do something to save a buck and piracy is cheaper and better because u can watch the movie repeatedly unlike renting a movie that would cost more and u only have it for a week or one month.
I think this youtbe thing will go good all they need to do is better quality of the picture and speed of loading them.
YouTube has gotten so commercial lately. Every time I go on there they have some moving advert banner flashing at the top of the screen. Last time I went on there was an obnoxious one for “Gamer”. Anyway… I wouldn’t pay YouTube to watch movies. I would watch them if there were commercials in them probably, but I don’t like watching movies in my computer chair with a small screen. I’d much rather rent a DVD or buy a DVD and watch from the comfort of my living room or even go to the movie theater for an even better experience.
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