YouTube to offer movie rental service

YouTube has announced it’s going into the movie rental business, starting with five films from the Sundance Film Festival, available from January 31st.

YouTube says it is reacting to movie maker requests for a finance model online that doesn’t rely on advertising – which doesn’t always fit their distribution and monetisation needs.

The Google Inc. owned company indicated that this is the beginning of an expansive plan to offer movie makers a new way of managing the distribution of their films.

“These are early days and in the coming weeks we’ll also invite a small group of partners across other industries, in addition to independent film, to participate in this new option”, YouTube said on their blog.

Google, which has struggled to make a profitable business out of YouTube after buying it in 2006 for $1.65 billion, may see pay-per-view as its best bet to grow revenues.

The initiative  may also represent a watershed in their attempts to lure major studios and networks to add content to the site, rather than to  Hulu – a venture of NBC Universal, News Corp. and Walt Disney Co.

“Making content available for rent will give our partners unprecedented control over the distribution of their work, they can decide the price of their videos and the rental duration; they can decide when and where their content is available; and they can keep 100% of their rights” says YouTube

Here’s a trailer for one of the 2010 Sundance shortlisted entries: