YouTube to sell pay-per-view films

Site's first rental offering launching out of Sundance

Commentary: Rentals are a reach for YouTube

YouTube is launching its first pay-per-view videos.

Five full-length independent movies drawn from the 2010 and 2009 Sundance Film Festivals will be available to rent for a limited time beginning Friday, marking the Google-owned site's first effort to glean revenues that aren't derived from advertising.

"The Cove," which was awarded in the documentary category at Sundance last year, will be available along with another festival selection from 2009, "Children of Invention." This year's selections involved in the YouTube offering are "Bass Ackwards," "Homewrecker" and "One Too Many Mornings."

All five films will be available to be streamed for $3.99. While "Cove" is a one-day rental, the other four are available for 48 hours.

To rent one of the films, a user must utilize Google Checkout to make payment. There is no option to download or own the film, the business model made popular by Apple's iTunes.

While this beta offering ends Jan. 31, YouTube execs will also be at Sundance searching for more content partners as part of the company's new "Filmmakers Wanted" campaign. YouTube is also extending its rental capabilities outside the entertainment industry to the health and education sectors, where it has experimented with transactional video before.

In contrast to YouTube's core offering, which allows anyone to upload content to the site, programming selected to be made available on a rental basis is invitation-only for now. The rental offering is limited to U.S. consumers while in beta, but YouTube aims to eventually take it global.

Content partners will be allowed to set the price and rental duration of a given title, as well as convert it to an ad-supported model after a given time. Revenues would be split between YouTube and the content provider, who would hold onto an unspecified majority of the revenues.

Content restrictions for rented films are the same as for any other videos on the site, which will allow R-rated films to be sold.

YouTube is also involved in Sundance as a sponsor of a new Next category, showcasing ultra-low budget films. YouTube and Sundance have collaborated in previous years for joint efforts such as a "Project: Direct" contest awarding the best short films.

"We believe there's significant synergy in what they're trying to do in this category and what we're trying to do to make this kind of content accessible," said Sara Pollack, entertainment marketing manager at YouTube.