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YouTube to offer Sundance films for rent

The online video site breaks into pay-per-view, with more movies and TV shows said to be on tap.

January 21, 2010|By Ben Fritz

The world's most popular free video website is getting into the pay-per-view business.

Google Inc.'s YouTube announced Wednesday that it will make movies from the 2009 and 2010 Sundance film festivals available for online rental. It's the first time that YouTube, which historically has offered its video free, will charge users.

Offering a pay service is a clear sign that Google, which has struggled to make a profitable business out of YouTube after buying it in 2006 for $1.65 billion, is looking for new ways to monetize the service. Luring advertisers to YouTube has been difficult because they have shied away from some of the content uploaded by users.

The Sundance movies are just a prologue for a much more ambitious pay-per-view venture, said people familiar with YouTube's plans, who spoke on condition of anonymity because they weren't authorized to discuss the matter.

Within months, the website will start to make available for rental other TV shows and films from Hollywood studios, these people said.

A YouTube spokesman, while declining to elaborate, said in an e-mail that 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 has been negotiating in recent months for specific pay-per-view streaming rights to films and television shows, said people familiar with the matter.

Under terms being discussed, the studios would set the price of the rental and YouTube would share in the revenue. Most of the Sundance films are being offered for $3.99 each, to be viewed during a 48-hour period.

Studio deals with YouTube would represent a breakthrough from previous attempts to secure content from Hollywood. The company has had little luck wooing major studios and networks to work with them.

Most studios have instead opted to put their shows on Hulu, a venture of NBC Universal, News Corp. and Walt Disney Co., which has had more success luring advertisers but is expected to start charging for some content in the next few months.

Offering pay-per-view movies and TV shows will put YouTube up against competitors like Apple's iTunes Store and Amazon.com. However, YouTube has the advantage of a huge audience that comes to its site for free videos. It streamed more than 12 billion videos in November, according to Comscore.

ben.fritz@latimes.com

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