According to(free registration required), officials from Google and YouTube are in active negotiations with the major movie studios in Hollywood to develop a pay-per-view streaming movie service with a worldwide focus. The films would be streaming—and not available for download—and would cost around $5 each.
They would also include the very latest films, with streaming rentals being timed to coincide with the DVD releases.
Apparently these talks with studios have been going on for some time now, but have recently increased in intensity. Google is said to be pushing hard to get something set up by the end of the year—most likely because they're playing catch up to Apple, who is rumored to be announcing major changes to their Apple TV device this week. They're also trying to catch up to Netflix and Hulu, both of whom have had paid streaming movies in place for some time now.
Google is reportedly highlighting their unique advantages over competitor companies—namely that they are both the world's most used and most trusted search engine, and the number one streaming video site on the planet… by a mile. And they believe they can combine these two strengths to create a huge push into the market with the new streaming movie service—it sounds from the article as though this would be a standalone service and website, though it's not completely clear.
And that's a fantastic pitch strategy, because Hollywood loves numbers: audience totals, box office totals, domestic gross, etc. And nobody has the numbers to wow with like Google/YouTube. Here's a particularly interesting and anonymous quote from the article:
"Google and YouTube are a global phenomenon with a hell of a lot of eyeballs – more than any cable or satellite service," said one executive with knowledge of the plans. "They've talked about how many people they could steer to this… it's a huge number.”
Now, ask yourself if you honestly think Apple or Hulu or Netflix can promise the same kind of audience reach that Google and YouTube can (the answer should be "no”).
I was just asked this weekend by an old friend who came by to visit if I was planning to make the switch to Blu-Ray—he was looking over my DVD collection to see what titles might be new since his last visit. Of course, my answer was that I would not be going Blu-Ray, and that I was going to skip that generation and go straight to digital, which is where this whole thing is headed anyway. Someday soon we'll all be waltzing into Wal-Mart with our smart phones or flash drives, drop down our money, and walk out with HD movies loaded up. It's just that rentals have gotten there first. Indeed, the Financial Times piece reminds us that DVD sales are in sharp decline, and Hollywood is desperate to replace those revenues with a digital offering.
Google has gone down this road before, in some ways, with the creation of Vevo—the music video site they built in partnership with pretty much all the major music labels. I mocked Vevo when it was announced, but it's getting some serious traffic these days. I've no doubt that if YouTube secures content deals with the major studios, they will bring a movie-streaming product to market that will be a competitor—if not the dominant player—in the space.