Entertainment

YouTube has expanded its pay-per-view streaming service with a wider selection of movies from $1.99 to $3.99. More content providers have joined YouTube to offer a 48-hour viewing window, up from five films at launch. While streaming providers are growing, an analyst said YouTube's movie-rental service feels more like an "experiment."

The online movie-rental market heated up another notch Friday, as YouTube expanded its pay-per-view streaming service. The popular video Relevant Products/Services site initially started in January with five independent films from the Sundance Film Festival. Now it will offer a wider selection of movies and TV shows at prices ranging from $1.99 to $3.99 for a 48-hour viewing window.

New content providers include Lionsgate, Image Entertainment, Crackle.com, Bollywood and Screen Media. Titles being offered include Oscar-winner Precious, The Cove, Reservoir Dogs, Pi, 3:10 to Yuma, Girl with the Pearl Earring, and Saw III, as well as anime, children's programs, and documentaries.

Less Than Ten Thousand

YouTube's earlier incursion into video rentals had modest success. According to news reports, the site has racked up less than 10,000 rental transactions to this point.

Online video rentals are being tested at a number of sites and services, including Netflix, iTunes, Blockbuster and Amazon. Earlier this week, there were reports that Hulu, a popular site that features TV shows and movies, will start offering a $10 monthly service in late May. The new service would give subscribers access to older episodes of current TV shows, beyond the most recent five episodes, which would remain free and advertiser-supported.

Video-on-demand margins are especially appealing to content providers and services, since connectivity Relevant Products/Services and playback costs are borne by the user and his or her high-speed Internet service provider, and because there is little additional labor involved to support more viewers.

Some industry observers are speculating that paid video-on-demand services could have an impact on the lawsuit that Viacom has brought against Google and YouTube over alleged copyright infringements. Offering streaming content from Viacom for a fee could be part of a final settlement.

'Cats on Skateboards'

Michael Gartenberg, partner and analyst at the Altimeter Group, said that the make-or-break criteria of a successful online video-rental service involves "scope, scale and device support."

YouTube's entry, he said, "has the feeling right now of an experiment," particularly because it's not clear how extensive its selections will be, if this is a regular pricing model, or what kind of devices it will support.

At this point, he said, "consumers don't necessarily want to watch movie on computers," but on TVs and, increasingly, on mobile devices. While YouTube is making inroads into those platforms, the service's level of support is currently unclear.

Gartenberg noted that Hulu's offering next month of a paid subscription service -- assuming it happens as reported -- is aided by the fact that "people go to that site to get content they can't easily get anywhere else." YouTube is going to have to reposition its movie-rental service, he added, since the site "still has too much association with cats on skateboards."