Google is negotiating with some major Hollywood studios to stream movies and television content through YouTube via a pay-per-view model. The Financial Times reports that they want to get this streaming by the end of the year. Movies would stream for about $5 each.
This would put Google in competition, once again, with Apple as well as with already-established movie streaming and rental services like Netflix, Hulu, and others. AppleTV (which will probably separate from iTunes as a brand) is working on a new-generation of digital video service while Netflix just penned a $1 billion agreement with Paramount, Lionsgate, and MGM. Meanwhile, Hulu (owned by Disney, News Corp, and Universal) is going public at a possible IPO valuation of $2 billion.
Earlier this year, during the Sundance Film Festival in Utah, YouTube ran a pilot program with five movies playing at the festival being available as rentals on the site. While not financially a success, the pilot did show that it could be done and made it obvious to many that premier movies might mean more money.
Google’s largest advantage in this game would be potential viewership numbers. Since Google drives more traffic than any other Internet site and since the video-on-demand/rental game online is still relatively new, Google could potentially grab a large chunk of the market. With the ability to push search traffic plus the traffic on the world’s most-used video sharing site, Google definitely has a leg up.