Peter Kafka

Recent Posts by Peter Kafka

Movies You've Heard Of Coming To YouTube. Will You Rent Them?

YouTube is finally ready to move its movie rental service from a long-running test into a real, bona fide movie store.

TheWrap’s Sharon Waxman first reported the news Monday evening. I’ve been able to confirm much of her story from people familiar with the plans.

Waxman’s report says the revamped store at Google’s video site “may start as early as this week or next;” I’m told it could be “weeks, but not months.” Big studios including Sony, Time Warner’s Warner Bros. and Comcast’s Universal are on board. So are indies like Lionsgate.

Notable holdouts: News Corp.’s Fox (News Corp. also owns this Web site) and Paramount, whose corporate parent Viacom is still suing Google over YouTube copyright claims.

YouTube started testing movie rentals internally in 2009, and has been renting a small handful to the public since 2010. Those movies have been offered as a streaming file, instead of the downloads that Apple’s iTunes rents, and I’m told the plan is for that to continue.

The difference is that you’ve probably only heard of a handful of the movies in YouTube’s existing store (I think “Made” is really under-appreciated). Post-expansion, you’ll get the same stuff, or much of the same stuff, that you can get from Apple, Amazon, and several other Web services.

So here’s the real question: Will you, or anyone else, use it?

Waxman quotes an unnamed executive who says they are “pretty excited,” but primarily because YouTube is embracing individual rentals, instead of a Netflix-style subscription plan.

A source I talked to from a participating studio, though, is less enthused: “A small VOD deal? Who cares? There are 40,000 other people who are selling VOD. This is a short-term, transactional deal.”

Another source familiar with the plans cautions that the initial expansion will only be the “first inning” of a longer game. Other features that Google could add down the road would be the ability to purchase movies, and store them in a cloud-based locker service.

Google is unlikely to get that ability until it makes several moves to mollify the big studios, primarily around copyright issues: They want the search giant to make it harder to find pirated movies, and they don’t want Google placing its ads on pirate sites, etc.

Google has been making some moves along those lines, but apparently not enough of them. (The flip side of this argument: Many studios are very interested cloud-based lockers, because they think that system, which allows people who own an individual movie to watch it on different machines, will support their eroding DVD sales. That may be more wishful thinking than anything else, but that’s for a different story.)

But the problem for both Google and the studios is that so far digital consumers seem largely uninterested in renting or buying individual movies.

Given the choice, consumers have overwhelmingly gone for Netflix, which now boasts 23.6 million subscribers. Research firm NPD estimates the company has 61 percent of the digital movie market.

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There’s a lot of attention and PR around Marissa, but their product lineup just kind of blows.

— Om Malik on Bloomberg TV, talking about Yahoo, the September issue of Vogue Magazine, and our overdependence on Google