YouTube finally goes Hollywood as Google inks deals with big movie studios to let users rent the latest releases the same day as they appear on iTunes. That’s the gist of an exclusive report by The Wrap which cites insiders claiming that Google has managed to cut new content deals with Sony Pictures Entertainment, Warn Brothers and Universal.

Others like Fox, Paramount and Walt Disney, of which Steve Jobs is the largest individual shareholder, apparently declined to join the initiative at this stage. The on-demand service will launch “imminently”, the publication noted, as early as this week or next. An industry executive explains:

We think it will start with video on-demand, but broaden to include sell-through over time. We are pretty excited because we are happy to see new entrants come in transactionally rather than a subscription model.

YouTube, which has been operating the YouTube Store since last year, offers rentals for two to four bucks a pop, handling payments via Google Checkout. These price points match iTunes rentals, with the exception of inexpensive 99-cent TV shows on Apple’s service. YouTube’s selection is, however, no match for iTunes and is currently limited to library titles, independent releases and older documentaries.


If Google secures the backing from all major Hollywood studios, YouTube could become a strong iTunes rival and will no doubt mount a significant challenge to other on-demand streaming services such as Netflix. Let’s not forget the convenience of enjoying Hollywood entertainment in a browser as opposed to having to go through a dedicated program like iTunes. Apple is thought to leverage its upcoming North Carolina server farm facility to handle video streamed to iTunes-authorized devices. The rumors has it that the California firm is planning on streaming live television programming and possibly even 1080p content.

iTunes movie and TV show rentals currently top out at 720p. Or, maybe Apple has a YouTube-killer in the works?

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