Google to take on Apple's iTunes with mainstream movie rentals on YouTube

Posted:
in iPod + iTunes + AppleTV edited January 2014
After reportedly finalizing deals with several major movie studios, Google is set to launch on YouTube a Video on Demand movie rental service that will challenge Apple's iTunes movie store for dominance of the VOD market.



YouTube began offering movie rentals last year, but had yet to rent mainstream movies, instead offering movies mostly from independent studios. Google plans to build out the service with the imminent launch of a movies on demand service from the major Hollywood studios, The Wrap reported on Monday.



According to the report, Google has successfully negotiated deals with major studios including Sony Pictures Entertainment, Warn Brothers and Universal, though "knowledgeable executives" indicated that Paramount, Fox and possibly Walt Disney have declined to participate at this time.



Google has quietly begun adding mainstream movies to YouTube, with rentals ranging in price from $1.99 to $3.99. "We've steadily been adding more and more titles since launching movies for rent on YouTube over a year ago, and now have thousands of titles available," a YouTube spokesperson, while declining to comment on the rumored major studio launch.







?We think it will start with VOD, but broaden to include sell-through over time,? said an executive at one Hollywood studio that has signed the deal with YouTube. ?We are pretty excited because we are happy to see new entrants come in transactionally rather than a subscription model.?



According to the report, movies will be made available on YouTube the same day they can be rented at video stores or iTunes, ahead of subscription services like Netflix.



?What?s really good about their approach is rather than another subscription offering, they?re going into a fresh area where there has been fewer leaps forward," said one studio executive.



Google executives appeared to hint at a YouTube VOD store earlier this month at a seminar. "Imagine if you had a video store on YouTube, where you could rent or buy the movie without being sent elsewhere," said YouTube vice president of TV and film entertainment Robert Kyncl.



However, when asked about specific details, Kyncl replied, "Obviously, there are things coming, but we can't talk about them yet."



For its part, Apple began offering iTunes movie rentals in 2008 with a major launch that included all the major movie studios. Movie rentals initially started at $2.99, with high definition versions and new releases costing more. After purchasing, customers had 30 days to start watching the rental and 24 hours to finish the movie once playback has begun.



With the launch of the second-generation Apple TV last year, Apple also began offering 99 cent TV show rentals, though Fox and ABC were the only two studios on board at launch.



At a media event to unveil the set top box, Apple CEO Steve Jobs suggested that the other studios would soon relent and begin offering TV show rentals. "We think the rest of the studios will see the light and get on board pretty fast," he said.



Research group IHS revealed earlier this year that Apple had maintained a 64.5 percent market share of the online VOD 2010, while losing some share to Sony and Microsoft. In 2009, Apple held 74.4 percent of the online movie market, which doesn't count subscription services like Hulu or Netflix.



In the recent March quarter, Apple generated a record $1.4 billion in revenue from the iTunes online store, though it's unclear what portion of that figure consisted of movie rentals.

Comments

  • Reply 1 of 16
    freerangefreerange Posts: 1,585member
    Ah, the foolish studios. Google is about driving everything to "free" through their advertising model. You have stepped through the devil's gate. You have taken the first step in completely commoditizing your product - once Google is through with you it will be free / have no value.
  • Reply 2 of 16
    solipsismsolipsism Posts: 25,726member
    I don’t see this working. Once you make a brand a place for free low grade videos it’s hard to escape that. Granted a popular movie will be a popular movie regardless of where you get it but unless it’s considerably cheaper, arrive before other streaming services, or has some other feature or convenience that sets it apart I don’t see it being a major player. But good luck to them.
  • Reply 3 of 16
    magicjmagicj Posts: 406member
    I don't know if this will be a success or not, but it's nice to see content providers continuing to expand their online offerings.
  • Reply 4 of 16
    alfiejralfiejr Posts: 1,524member
    "... that will challenge Apple's iTunes movie store for control of the VOD market."



    umm, actually NO ONE controls the VOD market today. Apple, the cablecos, Amazon, and soon others already divide it up. Google wants a slice of its own, not "control."



    what Google does intend is to try to copy most of the iTunes media ecosystem, since that is one of Apple's big advantages. a Google music store is coming too. that's the real story here.



    meanwhile, Apple is working on expanding its "cloud" services, Google's strong point. turnabout is fair play.
  • Reply 5 of 16
    solipsismsolipsism Posts: 25,726member
    Quote:
    Originally Posted by Alfiejr View Post


    "... that will challenge Apple's iTunes movie store for control of the VOD market."



    umm, actually NO ONE controls the VOD market today. Apple, the cablecos, Amazon, and soon others already divide it up. Google wants a slice of its own, not ?control."



    I?d say that iTunes Store, Netflix and YouTube each have solid control over their respective areas in the internet-based VOD market.
  • Reply 6 of 16
    asciiascii Posts: 5,941member
    I hope this extra competition encourages Apple to offer higher res downloads to Mac customers. I don't mind the price, but I don't like SD movies on my Mac. I notice that many movies I can download in HD on my iPad but only SD on my Mac. This is presumably because Apple have told the studios iOS is more locked down than OS X, but I don't see why Lion could not be made safe for HD downloads.
  • Reply 7 of 16
    maccherrymaccherry Posts: 924member
    What a snoozefest. The article instigates that Google is going after iTunes. Um, really? All they're doing is selling is selling the same intellectual property as Apple.
  • Reply 8 of 16
    jragostajragosta Posts: 10,473member
    Quote:
    Originally Posted by FreeRange View Post


    Ah, the foolish studios. Google is about driving everything to "free" through their advertising model. You have stepped through the devil's gate. You have taken the first step in completely commoditizing your product - once Google is through with you it will be free / have no value.



    Aside from that, you have Google's known disregard for anyone's intellectual property but their own.



    I hope the studios had VERY good lawyers write their contracts.
  • Reply 9 of 16
    herbapouherbapou Posts: 2,221member
    Both Google and Amazon are slowly building up a complete ecosystem. In a few years Apple is going to loose one of its biggest advantage which is the ecosystem. The only difference is since Apple is also making the hardware they will probably have better integration.



    With the appearance of SmartTV's Google is positionning itselft in the living room. I see a plan where they will have a complete offer (software side) with the phones, tablets, Pc and soon TV's. Smart TV example: http://www.samsung.com/us/article/ap...lt-for-your-tv



    Apple need to move faster with its AppleTV projet or they are going to play catch up instead of leading the market. It has to either licensed itunes or build a TV set (or both) and they need to do it this year. Let the living room war begin!



    In the mean time I see lots of video store closing down where I live. We may see there death in a few years.
  • Reply 10 of 16
    As I have stated before, Apple should cultivate the creativity of Apple products users. Right now, Apple products users are the number one contributors to sites like Flickr, and significant contributors to other sites, like YouTube, FaceBook, Flickr, etc.



    Provide incentives for creativity -- prices, revenue sharing, awards for excellence (usually more craved for than the financial rewards), etc.



    Provide the medium (iTunes, MobileMe, Ping, Apple Retail Store, iTunes University, NC Facility, etc.) to allow these Apple products users to interact and collaborate.



    Develop more creative Apps that will become the backbone of the creative arts to further support the above initiatives.



    Solicit these creations from Apple products users, and with minimal basic guidelines plus curations, let each creator dictate the price (free, iAd supported or subcriptions, with no upper limit) for viewing their creations.



    Place all these creations in a more easy to access manner (NC Cloud Facility, iTunes, MobileMe accounts), and selectively accessible to consumers as they see fit -- free or iAd supported, pay per view, subscription, etc.



    With the usual curation by Apple, there would be some level of quality expected, with reduced risk for malwares.



    And, you create an Apple Ecosystems that cannot be rivaled by any other offerings, that would not be so dependent on the whims of current creative products conduits (publishing companies, movie and tv studios, and other mass media).



    A great part of that edge would be because Apple products users are extremely loyal to Apple, once they get hooked to the Apple Ecosystems.





    Apple Ecosystems
  • Reply 11 of 16
    lkrupplkrupp Posts: 6,819member
    Quote:
    Originally Posted by Alfiejr View Post


    "... that will challenge Apple's iTunes movie store for control of the VOD market."



    umm, actually NO ONE controls the VOD market today. Apple, the cablecos, Amazon, and soon others already divide it up. Google wants a slice of its own, not "control."



    what Google does intend is to try to copy most of the iTunes media ecosystem, since that is one of Apple's big advantages. a Google music store is coming too. that's the real story here.



    meanwhile, Apple is working on expanding its "cloud" services, Google's strong point. turnabout is fair play.



    Funny no one has mentioned Netflix. According to recent articles they pretty much dominate the VOD market at this time.
  • Reply 12 of 16
    markbyrnmarkbyrn Posts: 606member
    How did the title become Google takes on iTunes when it should be Google takes on NetFlix - they are the leader by far in digital streaming; 61% share vs 4% for Apple according to NPD Group. I guess in the zeal to whip up the fanbois, you falsely pose it as Apple vs Google.
  • Reply 13 of 16
    herbapouherbapou Posts: 2,221member
    Quote:
    Originally Posted by markbyrn View Post


    How did the title become Google takes on iTunes when it should be Google takes on NetFlix - they are the leader by far in digital streaming; 61% share vs 4% for Apple according to NPD Group. I guess in the zeal to whip up the fanbois, you falsely pose it as Apple vs Google.



    Reading 101: Google is renting on youtube which is the same business model has itunes, not netflix. Netflix has a subscription model. It matters a lot since VOD renting movies will always be available before any subscription models.



    Of course subcriptions models are going to have more volume, have look at the prices, you cant beat 8$/month for unlimited movies compare to renting at 5$ per movie. The google model competes with itunes, not netflix.
  • Reply 14 of 16
    alfiejralfiejr Posts: 1,524member
    Quote:
    Originally Posted by lkrupp View Post


    Funny no one has mentioned Netflix. According to recent articles they pretty much dominate the VOD market at this time.



    Netflix subscription VOD is for a limited selection of older films, not the new releases that are offered as single VOD rentals for $x at the same time by iTunes and the rest, or even before, as the DVD releases. so technically a different sub-market.



    if "all movie rentals" is the market under discussion, including mailed DVD's, sure, Netflix is #1. which means VOD is still way behind physical DVD rentals. because of the price of course. VOD costs at least twice as much per movie as Netflix, and its not as flexible. that's the real problem for VOD - studio greed.
  • Reply 15 of 16
    alfiejralfiejr Posts: 1,524member
    Quote:
    Originally Posted by herbapou View Post


    Both Google and Amazon are slowly building up a complete ecosystem. In a few years Apple is going to loose one of its biggest advantage which is the ecosystem. The only difference is since Apple is also making the hardware they will probably have better integration.



    With the appearance of SmartTV's Google is positionning itselft in the living room. I see a plan where they will have a complete offer (software side) with the phones, tablets, Pc and soon TV's. Smart TV example: http://www.samsung.com/us/article/ap...lt-for-your-tv



    Apple need to move faster with its AppleTV projet or they are going to play catch up instead of leading the market. It has to either licensed itunes or build a TV set (or both) and they need to do it this year. Let the living room war begin!



    In the mean time I see lots of video store closing down where I live. We may see there death in a few years.



    yup. and you forgot to mention Sony and Nokia/MS too.



    but the market power of inertia is strong (look at Windows). why should a consumer take the trouble to switch from iTunes, which they have been using for years and know well, to one of a half-dozen copycat ecosystems which don't work fully with each other (DLNA is too limited). which is why the Amazon media store is still far behind. and Apple's new iTunes cloud service will maintain the status quo there.



    the same fragmentation applies to the new smart TV's - each OEM wants its own ecosystem. whereas the very cheap AppleTV works with any brand. and now AirPlay and the iPad's HDMI mirroring put iOS right onto the TV screen. that's "moving fast," and there is great potential for quick expansion here, especially games. and powerful ATV apps (like the new MLB) will come to replace conventional TV channels - first sports, then live/PPV entertainment, then news/events, and so on ... no doubt more is coming this year.



    sure Google and the rest will copy what Apple does with TV. but it won't be quite as slick and easy, and it won't work with iOS devices or each other's.
  • Reply 16 of 16
    matrix07matrix07 Posts: 1,993member
    Quote:
    Originally Posted by AppleInsider View Post


    Google executives appeared to hint at a YouTube VOD store earlier this month at a seminar. "Imagine if you had a video store on YouTube, where you could rent or buy the movie without being sent elsewhere," said YouTube vice president of TV and film entertainment Robert Kyncl.



    Why? I never imagined that. What good does it do? I don't come to YouTube to spend. But if I can rent French movie on French site and Korean movie on Korean site using the same credit card then I can see the potential.
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