The Financial Times is reporting that Google is in talks with Hollywood studios to launch a global pay-per-view video service by the end of 2010. If it happens, YouTube will transform into a major player in streaming rental movies.
People familiar with the talks are saying that Google is pitching to the movie studios that “the international appeal of a streaming on-demand movie service” tied to the world’s most popular search engine and YouTube, will attract a “huge number” of people. Basically, Google believes that YouTube and Hollywood would be pretty damn successful together. Prices per rental aren’t set yet but it’s expected to be around $5-a-pop.
Negotiations between Google and the studios have been going on for some months now but have ramped up in recent weeks (maybe due to one Sept 1st event). If the reports are true, combined with the future Google TV, this deal could turn Google into a real player in digital media distribution. And a direct competitor to Apple in another market.
As the internet continues the inevitable¬†transition¬†from free television and movies to paid content, it looks like the biggest free video site may be switching to a paid model. Youtube is in talks with Hollywood studios to offer pay-per-view rentals, and it could launch as soon as the end of the year. Google is pitching the idea based on Youtube’s huge traffic, which would lend itself well to impulsive rentals, especially if they’re priced competitively against Apple’s upcoming iTV offerings. Coupled with Google TV’s upcoming release, the search engine may very well end up becoming the biggest entertainment provider out there.

Chris Gullo