According to The Wall Street Journal, YouTube will begin testing a new online video service on Friday, entering the rental turf of other technology giants such as Apple Inc., Amazon.com Inc. and Netflix Inc.
YouTube will begin testing the service with five movies from the Sundance Film Festival. It plans to later expand its rental selection to a range of health, education and fitness categories, a company spokesman said.
The first five films, which will cost $3.99 to rent from Friday through Jan. 31, will include “The Cove,” a documentary about the dolphin fishing industry, and “Homewrecker,” a comedy about a locksmith.
Wired explains what it means to the content producers.
Producers have long been able to monetize their videos on YouTube through a partner program that gives them a majority of advertising revenue. The rental option offers a new way to make money on YouTube that doesn’t rely on advertising — somewhat similar to the way the New York Times now plans to charge for online content and the way the Apple-acquired Lala service offers online music without ads.
We’re going to see many more paid content models emerge. The ad supported model worked before the rise of the Internet. Now it’s just one revenue stream, not the revenue stream.
