YouTube Goes NetFlix, But With Only Five Movies

Last Updated Jan 21, 2010 1:25 PM EST

Maybe you got excited, like I did, when you saw headlines that YouTube was starting a movie rental service, but hold your horses: right now the rentals only apply to five independent films, which is pretty boring, but in keeping with YouTube's legacy as a place for video that isn't necessarily distributed by the big boys. The launch, which is timed to coincide with the opening of the Sundance Film Festival, calls for the Sundance-featured movies to go for about $4 each. (A separate program, "Filmmakers Wanted" will distribute independent filmmakers' work for rental on the site, with filmmakers determining the pricing and taking most of the revenue.)

This is nice, isn't it? But where's YouTube's ambition? As far and away the leader in online video, shouldn't it be eating other online video distributors like Netflix and Hulu for lunch?

Fortunately, this independent film rental business looks like the appetizer. Per The New York Times, YouTube did a test last summer, available only to Google employees, of a broader rental service with content from major studios that may have included Sony, Warner Bros. and Lionsgate Entertainment. If it got into the game fast enough, it would have the potential to beat NetFlix at its own online rental business, which requires a "Netflix-ready device" to work. By contrast, even if the user experience isn't necessarily great, a YouTube movie can be watched over any computer with a broadband connection.

I read somewhere that moving into the online movie rental business wasn't the right fit for YouTube because people are used to going there to see video of of its legacy as a go-to site for cats peeing in toilets. Or something like that. Hogwash. As long as the site has a good interface, transactional system and lots of content, users can easily get over the fact that a place that gave the world "David After Dentist" can also stream "Raging Bull." Get on with it, YouTube.

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