YouTube eyes streaming rental agreement

In talks with Lionsgate, Sony and Warner Bros.

YouTube wants to offer rentals of full-length films at roughly the same time studios release them on DVD.

It's possible that the studio response will amount to, "How's does it feel to want?" But it's worth noting that Warner Bros., Universal and others have begun testing the simultaneous release of films on DVD and cable pay-per-view.

So it wouldn't be much of a stretch for studios to allow YouTube to stream new-release titles as well -- provided the traditionally free Web site would pay for them. Cable companies generally offer movies for $3.99 a viewing, with studios getting a cut of PPV proceeds under their revenue-sharing agreements with Comcast, Time Warner Cable and others.

Studios already allow Netflix and Web sites such as CinemaNow and Movielink to offer feature films. But YouTube, which always has been advertising-supported, offers only clips of Hollywood-produced content and no full-length features.

There appears little chance that YouTube will secure an advertising-supported scheme to stream full-length movies. Talks about just that were held several months ago but never got much traction.

A fee-based arrangement and studio revenue-sharing deals with YouTube look more likely.

Issues of timing aside, talks between YouTube and a handful of studios about some sort of agreement on movie streaming have gotten decent traction. Sony, Warners and Lionsgate are among studios discussing potential agreements with YouTube modeled after their respective PPV pacts.

The talks started about two months ago, but the parties have failed to agree on financial terms and other details. None of the parties would confirm the talks for the record when word of the discussions circulated Wednesday, but spokesmen for YouTube and Lionsgate acknowledged an interest in the area.

"While we don't comment on rumor or speculation, we hope to expand on both our great relationship with movie studios and on the selection and types of videos we offer our community," a YouTube spokesman said.

Said a Lionsgate rep, "We're always exploring alternatives for monetizing our content in a digital environment."

Paul Bond contributed to this report.
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