Update at foot of post:

Google’s YouTube is said to be planning a movie subscription service, putting it in direct competition with offerings from Netflix and Amazon.

According to a report from the New York Post, the Google has set aside $100 million for content deals with movie studios and other premium content providers.

Google is said to be planning a launch for the service in the UK and Europe, before expanding to the US. Given that the European subscription movie market is still very much in its early stages, this would seem a wise choice. Netflix already dominates the US, with a strong offering from Amazon available too.

In Europe, the main player is LoveFilm, which Amazon is currently in the process to acquiring. If YouTube can use its brand to make a strong play in the market before Amazon expands LoveFilm’s catalogue and reach beyond the few countries it currently operates in, it could be in with a shot.

YouTube already offers one-off movie rentals and some free films, although the service has always seemed a little buried behind the service’s user-generated content. Google’s challenge is to get the public to see its video service as a go-to place for professional content.

UPDATE: Google has sent us the following statement, denying any such plans at present: “”Today, YouTube is focused on building out and improving its current US-based rental offering. While we aim to always push all of our products out globally to our community, we have no plans to launch a European rentals service in the near future.”