YouTube’s much-hyped movie rental service has started off with a whimper, rather than a bang.
The service, which offered five Sundance Film Festival titles for 10 days last month, netted YouTube USD $10,709.16. At $3.99 per rental, this means that only 2,684 films were rented. These numbers likely haven’t scared their competitors at Netflix, the iTunes Store and Amazon’s Video on Demand.
While pundits all over the web have labeled YouTube’s lack of success here as a failure for the pay-for-content model — even going so far as to compare it to Newsday’s woes — the comparison seems to be a faulty one.
It does bear noting that this movie rental service offered only five indie films for 10 days. Despite all of the press that tech blogs gave the service, it wasn’t advertised on the main site during this time. In fact, it’s actually rather difficult to find the rentals section of the site. The demand for the service wouldn’t have been particularly high, as the program was running for only 10 days, the content was hard to find and it was geared towards a niche. And yet the service still was able to find 2,684 people willing to part with $4 to watch a film.
YouTube is currently in talks with major studios about expanding the rental program to more mainstream fare. While this will bring it into competition with services like Netflix, they also intend to partner with less mainstream content providers to create a broader product base than a company like Netflix. Deals are already in the works with Anime studios, educational content providers and other less-conventional content makers. While these content deals aren’t likely to draw a huge audience, they will attract new users to the service.
In short, YouTube’s still working on their rental model. Their content, while weak at the moment, will only get stronger. The online video business just got that much more interesting.
I agree with you. YouTube is a sleeping giant of this space. if it starts to use it's huge audience and advertise the rental service then the revenues would jump. Also, it has so much data on users that it can offer smart, contextual recommendations better than anyone else.
Plus, when Google puts its mind (or hivemind as it were) to something, their competition usually suffers a horrible, humiliating and protracted death.
$4.99 per movie at youtube? no thanks, theres a lot better options out there :(
The question is, I believe they have not done due to start advertising, I use a lot of Youtube and so far I learn that they had this service. And that also depends on the connection that I feel I have.
I think you also have to look at broadband contraints that people have. People that have Comcast and other Internet providers have a bandwidth cap. I won't download a movie at home using my bandwidth as I am using Satellite. I know people do streaming stuff and such and you can download movies from iTunes, but I don't think the movie downloading business is really going to take off until bandwidth caps are removed.