YouTube takes on Netflix with online movie rentals

YouTube takes on Netflix with online movie rentals

Summary: YouTube's new movie rental site isn't going to crush Netflix. It's built-in social tools will certainly give it a run for it's money, though.


YouTube has sat among the top three or four websites online for some time now. It's the bane of system administrators' lives, sucking up bandwidth with higher and higher resolution video, and eats capped data plans for lunch. And now, as we've anticipated for some time, YouTube is offering streaming video rentals from big-name studios, going head to head with Netflix.

In a blog post today, the company outlined its plans to become a dominant player in the video rental industry, even if it is a bit late to the party:

In addition to the hundreds of free movies available on the site since 2009, you will be able to find and rent some of your favorite films. From memorable hits and cult classics like CaddyshackGoodfellas,Scarface, and Taxi Driver to blockbuster new releases like InceptionThe King’s SpeechLittle FockersThe Green Hornet and Despicable Me. Movies are available to rent at industry standard pricing, and can be watched with your YouTube account on any computer...With 35 hours of video uploaded every minute to YouTube, there’s a sea of content that can add to your movie experience. Many movie pages feature YouTube Movie Extras -- free behind-the-scenes videos, cast interviews, parodies, clips and remixes from YouTube’s unique community of content creators.

This actually reinforces my belief that Google doesn't need to invent a new social platform. Not only can it aggregate content from existing social networks, but it also has YouTube. YouTube's built-in commenting, subscriptions, and video response mechanisms make the site a robust and extremely modern social network. Video remains the next frontier on the web and it only makes sense that a social approach to video is the next frontier of social media.

YouTube is also adding content from Rotten Tomatoes to the movie rental subsite bringing in an additional layer of Web 2.0 goodness and the social tools already in YouTube will take movie viewing to a new level of social interaction. Is this a Netflix killer? Probably not. Netflix is very entrenched and offers a huge variety of movies and TV series, both streaming and on disk.

However, it has the potential to be a very worthy Netflix competitor. The only problem I see with YouTube Movies is price. While there are many free movies available, many more are $2,99 or $3.99 and aren't available in HD (the videos are high quality, but if I had my 'druthers, I'd be watching HD video on BluRay or streamed from vudu or Netflix. I can watch thousands of movies and TV shows for free on Netflix as part of my membership; 5 movies on YouTube would pay for my Netflix membership.

Similarly, as Redbox grows in popularity and ubiquity, When I can rent 3 BluRay new releases or four DVD new releases for the price of 1 streaming movie on YouTube, all the social hooks aren't going to make up for the price.

Then again, Apple and Amazon are doing pretty well for themselves with their own comparably priced movie options. I see movie prices having to come down some, though, if YouTube wants to be Google's answer to Netflix (or even to really take on iTunes movies).

Topic: Social Enterprise

Christopher Dawson

About Christopher Dawson

Chris Dawson is a freelance writer, consultant, and policy advocate with 20 years of experience in education, technology, and the intersection of the two.

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  • The real kicker will be if it is available outside the US

    All the big name players have not bothered about customers outside the US particularly in Asia. So there are few or non existent streaming options available in Asia. With the rise in sales of HDTVs & good bandwidth (at least in some countries like Singapore), audiences are in a position to subscribe to such services. Apple, Amazon, Netflix etc. have completely ignored non US populations. If youtube can serve these people, there is a tremendous potential.
    • RE: YouTube takes on Netflix with online movie rentals

      @vivektanavde The media cartel will block that one, sure enough. The controls are already in place at Youtube, all content is marked for country of origin and permissible countries of playback.
      terry flores
      • RE: YouTube takes on Netflix with online movie rentals

        @terry flores An the media industry has miss the point of the internet, and that why torrents will rein supreme on the internet for many decades to come.
    • RE: YouTube takes on Netflix with online movie rentals

      @vivektanavde Hello, if those outiside of the U.S. have access to the websites, wouldn't they have the ability to stream as well.

      Street Speculator
      • RE: YouTube takes on Netflix with online movie rentals

        @Street Speculator, No Sir. I'm an expat living in the Philippines and Streaming seems to be USA only. Many YouTube videos are blocked here as well.
  • RE: YouTube takes on Netflix with online movie rentals

  • FINE

    But what about bandwith?? youtube videos load slooooww! either way I prefer Nexflix :)
    • RE: YouTube takes on Netflix with online movie rentals

      Especially when these movies are $4 a piece which is half a month's fee for netflix. No thanks. I will go to redbox before I pay that much.
  • RE: YouTube takes on Netflix with online movie rentals

    This means that I will finally get a decent Netflix client package for my Android phone, it will be required if they need to compete with Youtube.
  • RE: YouTube takes on Netflix with online movie rentals

    It is easy to download common videos from youtube and watch them when convenient. I suppose these rental movies, which have to be paid for, will have in place some method to keep that from happening.
    • RE: YouTube takes on Netflix with online movie rentals

      @opcom Anything that is streamed, or viewed in that case, on your computer can be captured and saved as a file. As long as information is decoded and presented to you through your monitor, it can be kept. With Netflix, a monthly subscription means that people can always view the same movie over and over, and this is a kind of inherent deterrence against pirates, but if they had to pay for individual movies, I can almost guarantee there will be more "I'll save this for my collection." I too have no idea how Youtube plans address this...
  • RE: YouTube takes on Netflix with online movie rentals

    Works on my EVO 4G flawlessly! Just watched Super Sized for free. This is a good stopgap measure while some, including me await Netflix for Android!
  • It isn't competition really.

    You just can't beat the price of Netflix. With diligence, you could probably get 15 DVDs through the mail and have the online catalog for $10/month. Even with taking into account a $80 Roku if you don't have a computer or game system connected to your HD system, 15 rentals @2.99, Netflix pays for itself in 2.03 months AND you still had all the streaming content.<br><br>They are competing with Cable companies and that's about it.
  • MS should buy Netflix also now

    I feel it's not just Skype, MS should buy Netflix as well to flex it's mus. with Amazon/Apple/Google to solidify it's Zune platform and make Zune free...!
  • Sounds Cool but,

    Then again, the prices do the decision making. If it were $4 for a month of free movies, then that would have been a great start; but, since it's per individual movie, neh eh...not gonna pull me away from Netflix (+ BitTorrent for those Movies I wanna keep 4 ever) :p
    • RE: YouTube takes on Netflix with online movie rentals

      @MrElectrifyer Subscriptions are definitely the way to go. There is a reason Netflix is the most successful online movie service. No one likes paying for individual movies and not want to keep them.
  • RE: YouTube takes on Netflix with online movie rentals

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    Having researched the movie rental industry for years, and having owned an independent movie rental store back before BlockBuster blew us all out of business, look how the big boys have ruled retail for decades. WalMart is perfect example, and BlockBuster is now paying the price given they ignored any competition for years.

    NetFix did $3.2 billion in revenues in 2011, and even with price increase announcement, and the loss of almost a million subscribers, they still increased subscriber base by almost 50%. Talk about a recession proof industry, this is it.

    Streaming is going to be the future in movie rentals, just as it is for music, but not unliess the avaiable bandwidth is able to absorb all this additional traffic. Then again, how many actually have high speed internet or smart phones to download these movies. It will be years before streaming takes over industry, but any competition is good for industry after seeing BockBuster monopolize industry for years.

    With so many companies jumping into industry, Amazon, Apple, Google and Youtube, will this drive prices down? I sure hope so, in fact, a newcomer is starting with NetFlix model of home direct movies, but with a BIG difference, low low prices. At just $2.08 per month, compare this to the BIG boys at $8.00 to $10.00 per month. With streaming option to be released when they go public, right now they are using a twist none of the others are promoting, word of mouth where you can earn unlimited free movies for referring a couple other people through an affiliate program like many promote thousands of businesses like Amazon and NetFlix.

    Will this new low cost option put pressure on the BIG boys? Only time will tell, but given they have plans for kiosk system like RedBox, another huge success and the main reason why BlockBuster was put into bankruptcy, it will certainly get interesting when launches to public in July. With beta testing near completion and movies going out, and at only a couple bucks a month for unlimited movies, this new concept is looking good.