YouTube wants to offer movie rentals and is in talks with several top movie studios about obtaining licenses to stream feature films on a rental basis.
YouTube is discussing the service with Sony Pictures, Lions Gate Entertainment Corp., and Warner Bros. Studios, according to a story published Wednesday in The Wall Street Journal.
This is a natural progression for YouTube which has been engaged in a year-long campaign to secure more professionally made content. The Google-owned video company offers films on an ad-supported basis from Sony Pictures and MGM. YouTube declined to confirm or deny the WSJ report.
One studio executive familiar with the talks downplayed the significance of the talks, saying no deals have been struck and the conversations are at best in the early stages. The executive pointed out that the studios have these discussions all the time and that there's a large host of services that already sell downloads or offer digital rentals, including Amazon, iTunes, Netflix, and Microsoft's Xbox.
"Why wouldn't the studios talk to YouTube?" the executive said.
There are also full-length films available to the public for free on ad-supported sites, such as Sony Pictures' video site, Crackle.com, and on Hulu.
But YouTube's U.S. audience is now over 100 million and the site's potential to generate big ad revenue from premium content is still not fully understood.
Sources in the film industry say however that if Google can prove it can protect streaming content from piracy and will offer a lucrative deal beyond just a percentage of ad revenue, there's no reason why YouTube can't be the Comcast of the Web.
This article was first published as a blog post on CNET News.
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