The Financial Times is reporting that Google is in talks with Hollywood studios to launch a global pay-per-view video service by the end of 2010. If it happens, YouTube will transform into a major player in streaming rental movies.
The site would be either part of or connected to YouTube, and Google would use its massive search and video empires to direct new users to the new service, helping it stand toe-to-toe with Apple and other competitors in the space.
According to anonymous sources cited by The Financial Times, including an executive with knowledge of the deal, talks have been taking place for months, but they’ve picked up recently. The big reveal here is not the fact that Google wants to launch such a service — we’ve known that for a long time — but the reports that studios are increasingly enthusiastic, so much so that the service is expected to go live by year’s end.
“Google and YouTube are a global phenomenon with a hell of a lot of eyeballs — more than any cable or satellite service. They’ve talked about how many people they could steer to this…it’s a huge number.”
Even as Hollywood titan Viacom (VIA), which owns Paramount Pictures and Comedy Central, appeals Google’s $1 billion YouTube legal victory, top Tinsel Town executives are getting cozy with the search juggernaut, the article suggests. Google has insisted that YouTube, the free video site it purchased for $1.65 billion in 2006, would be profitable eventually. YouTube has been testing streaming video rentals — not downloads — since the beginning of the year, the paper reports, citing a potential price of $5 per movie rental. [via Daily Finance, Venture Beat and Financial Times]