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What Took YouTube So Long?

YouTube potentially partnering with the major studios on a movie "rental" business is one of those deals that begs the question, "What took them so long?" YouTube, which isn't yet profitable, could certainly use a real business model. Albeit mostly short-form, the Google-owned site already accounts for over 40% of all videos viewed by U.S. Web users. And, the movie studios are always looking for new revenue streams to offset sagging DVD sales.

Still, as Businessweek's The Tech Beat blog notes, YouTube hasn't always seen eye-to-eye with Hollywood. "The talks follow a gradual thawing of relations between YouTube and at least some studios."

Also -- should it go through -- the deal is far from a guaranteed success. For one, "YouTube has been pushing its way into premium full-length content for a while now, but success has been a mixed bag," writes NewTeeVee. "The video site streamed Sony movies like Ghostbusters via Crackle, and also has existing partnerships with MGM and Lionsgate ... Two recent deals with Warner Bros. and Disney resulted in only short-form clips."

Then there's the matter of competition. "There's a large host of services that already sell downloads or offer digital rentals, including Amazon, iTunes, Netflix, and Microsoft's Xbox," one unnamed studio exec tells Cnet.

What's more, as Econsultancy.com points out, the "movie studios are launching a Hulu-esque site called Epix to stream movies online this fall."

For YouTube's video rental business to succeed, the key issues to be resolved are pricing and timing of releases, another unnamed studio exec tells The Times. "Though DVD sales have dropped, studios remain protective of the period during which films and shows are available on DVD but not in other formats."

Read the whole story at Wall Street Journal »

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