• by Wayne Friedman , Staff Writer, September 3, 2009

Is YouTube morphing into more of a TheirTube business? 

Now the popular video site is considering adding pay theatrical movies to its site, according to new reports. That means, if successful in striking deals with movie companies, YouTube would have a range from free user-generated video, at the low end, to pay theatrical movies, at the high end.

For some industry analysts, this makes perfect sense. Start a business by giving it away for free. Get everyone comfortable with it. Create an enormous Internet footprint, and then -- bam! - start charging big fees for some of that access.

The irony here is that in the age of supposed media specialization, YouTube could end up being the modern-day digital media version of where big cable system operators started out in the late '80s/early '90s. (YouTube has also made some TV program and content deals as well).

To TV and movie makers, it makes sense to sell content in as many places as possible, aggregating digital video users no matter where they are.

Movie studios make deals with plenty of other digital media platforms -- Netflix, Amazon and Apple, to name a few.  In this regard, they might tell you YouTube is just another video destination.

Of course it was these same studios that, not so long ago, blamed YouTube for all that pirated stuff appearing on the site from its core of user-generating-video makers. Recently YouTube has been more aggressive in cleaning up copyrighted stuff.

But with that kind of history, YouTube hasn't been just another video destination.  It also beats out most other sites for unique viewers and usage.

It's this domination in accessing large number of video users that movie studios now want, especially now that DVD sales have been weak. 

Google says its YouTube business in finally inching closer to profitability. But it wants to do so while retaining its user-generated roots.  Movie companies might have to take the good with the bad.