Both the Wall Street Journal and Reuters report that several Hollywood movie studios are talking with management at Google’s YouTube video viewing web site regarding the possibility of providing streaming video of Hollywood movies through YouTube. It appears that Sony, Lion’s Gate, Metro-Goldwyn-Mayer and Warner Brothers would like to explore the possibility of offering rental movies to YouTube visitors.
Streaming movie videos are already available through Netflix, Apple iTunes and Amazon. The YouTube offering would use a pay-per-view rental model. The speculation thus far says that each streaming video rental would cost $3 to $4, which is roughly what most people pay to rent a DVD or Blu-ray movie from a brick-and-mortar rental store. Streaming video does add a convenience factor where you can watch any movie that you want to see at any time.
This does conflict with a recent announcement from several Hollywood studios that indicated that they will no longer provide new DVD releases to Netflix, Blockbuster, Red Box and other movie rental outfits for the first 30 days after a movie is released. They blamed dwindling DVD sales on the availability of rental DVDs. Obviously, they are trying to force movie buffs to buy more DVDs rather than wait 30 days for a rental to be available.
Three issues could thwart the YouTube video rental concept.
First, YouTube users are used to viewing all videos for free and may push back when it comes to paying a fee to watch anything.
Second, it is not yet clear how the streaming videos would be delivered to users. While it is easy to deliver streaming video to a user’s PC, it is not so easy to deliver it to a television or home theater. I am not familiar with the iTunes service, but both Netflix and Amazon require a special box that connects to their services. The Roku streaming media box is one such device for pulling streaming video into an HDTV or home theater. Several HDTV manufacturers are building streaming media capabilities into newer HDTVs, but this feature is not yet commonplace.
Third, there are still a lot of technology hurdles that could make streaming video less than pleasant to watch. Consistent DVD quality streaming video requires a lot of available bandwidth. High definition streaming video requires a lot more bandwidth. Even with a high speed cable connection, download speeds tend to be highly variable in most areas. If streaming movie video rentals really take off, that could choke the overall bandwidth for any metro area on a Friday or Saturday evening, which would be prime time for movie viewing.
It will be interesting to see if YouTube can be converted into a video rental powerhouse. According to Reuters, Google is under pressure to find ways to make YouTube profitable, because the curent revenues from advertising do not cover the cost of running the popular web site.