Google Inc.’s YouTube online video service announced on Wednesday that it will offer five films from the Sundance Film Festival (2009 and 2010) for rental from this Friday until January 31st to U.S. users. In addition to the titles offered in partnership with the Sundance Film Festival, the site will offer a small collection of rental videos from other U.S. partners across different industries, including health and education, in the weeks after.
“These are early days and 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. Anything that brings more content to the YouTube community is a good thing,” the YouTube blog reads. “And making content available for rent will give our partners unprecedented control over the distribution of their work.”
The announcement states that owners can decide the price of their videos and the rental duration, when and where their content is available and will keep 100 percent of the rights. The site will be seeking more Independent filmmakers to participate in the rental program as part of its “Filmmakers Wanted” campaign at the festival.
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According to industry sources, the popular online video sharing site YouTube may begin offering movie rentals by the end of the year, as parent company Google is currently in talks with the major movie studios.
The negotiations have stalled on only two issues, say the sources, which are pricing and “agreed-upon release date.”
The pricing will likely be in line with current rental models, such as those offered by iTunes, VUDU and CinemaNow which each offer the movies for between $1.99 and $3.99 USD, with 24-hour viewing periods once you have started watching the movie.
Studios very close to already signing deals are Lions Gate, Warner Bros., MGM and Sony, likely because they all currently have working revenue-sharing relationships with the streaming site.
Google declined comment on the speculation, as did the studios.
If the sources are accurate, YouTube could begin testing the rental service later this month, as a three-month “beta.” Studios would receive about 60 percent of all revenue from the rentals, but that number could vary from studio to studio, adds the sources.
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Last week PRS for Music, the UK performance royalty collection organization, announced revenue for terrestrial broadcasts and internet streaming in the first half of 2009 was down 6 percent from last year.
PRS for Music collects royalties for close to 60,000 songwriters and music publishers.
An official statement blames “phasing of revenues” for lower than expected earnings, but conveniently doesn’t mention the loss of income from YouTube earlier this year. In March, while PRS for Music was renegotiating royalty rates with YouTube, the world’s biggest online video service began blocking access to most music videos for UK viewers.
At one point last year YouTube was reportedly responsible for 40 percent of PRS members’ video plays. It’s hard to imagine that the loss of their royalty payments since March wasn’t a major contributor to the revenue decrease.
In May PRS for Music announced new streaming royalty rates, which took effect at the beginning of this month.
The per stream minimum dropped substantially, which should help smaller webcasters. At the same time the basic rate increased to 10.5 percent of revenue from 8 percent.
