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YouTube’s movie-rental play
Can the video site make money with movies on demand?
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oogle may have “found the best way to monetize YouTube yet,” said Ross Miller in Engadget. According to The Wall Street Journal, Google is in late-stage talks to enter the movies-on-demand business, with Lionsgate, Sony, and Warner Bros. on deck to stream their feature films through YouTube for a $3.99 rental fee. That would put YouTube in “a pretty competitive spot versus the likes of Netflix, Amazon VOD, and Apple’s iTunes movie store.”

YouTube had better hope its “attempt to woo Hollywood studios will go better this time,” said Ronald Grover and Robert Hof in BusinessWeek. But if Google and the studios can iron out their differences over pirated content on YouTube, this could be a win for both sides—YouTube, the most popular video site, might finally make some money, and the studios could counter slumping DVD sales.

Yes, it’s “a fine idea,” said Douglas McIntyre in 24/7 Wall Street. Too bad the online movie-rental “market may already be taken.” YouTube will not only be up against Apple, Amazon, and Netfilx, but also the big cable companies. Google needs to do something to raise revenue, though—despite YouTube's massive audience, it lost an estimated $300 million last year.

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