Google Challenges Apple, Netflix, Hulu with Video Rentals Service via Youtube

Google Challenges Apple, Netflix, Hulu with Video Rentals Service

Google is about to launch a premium video on demand service through YouTube that will directly challenge iTunes, Netflix, Hulu and even cable TV. In the past YouTube tested video rentals (and has continued to do so) but the titles were limited and the results have been muted.

The new service appears to be called “YouTube Store.” Below is a cached image.



The new YouTube movie rental service might start as soon as next week according to reports. It apparently will offer films from several of the major Hollywood studios and a number of independent distributors. Paramount, Fox and Disney are reportedly not part of the deal at this point.

Movies will be available for rent on YouTube as soon as they’re released on DVD. Prices appear to range from $1.99 to $3.99 depending on the film.

Netflix and Hulu have monthly subscription models, while iTunes offers per-title rentals. YouTube appears to be avoiding subscriptions for now. The success of the service will depend on the breadth of movies available and the quality of the experience. Assume that Google would also make rentals available on tablets and smartphones, as well as TV and online.

Netflix yesterday reported Q1 results, saying that it now has 23.6 million subscribers. Comcast, the nation’s largest cable TV provider (and now owner of NBC), said that it had just under 23 million subscribers in Q4. In other words, Netflix is larger than Comcast in terms of subscribers.

The fact that Netflix is now larger than Comcast suggests a symbolic “changing of the guard” and movement toward IP-based video-on-demand. YouTube clearly sees an opportunity to diversify revenues and evolve into one of the leaders of the next wave of “TV” (IPTV) or whatever we want to call IP-based video delivery.

As an aside, if Google is able to succeed with the new service it may also help Android developers better montize apps. That’s because Google will capture your credit card number for rentals, which then can also be used to buy apps with a single click.