February 3, 2010, 12:00 AM

YouTube attracts 2,684 paid rentals for Sundance movies in January

YouTube’s 10-day experiment last month with paid rentals attracted a total of 2,684 views of five independent films.

YouTube’s 10-day experiment last month with paid rentals attracted a total of 2,684 views of five independent films that consumers could watch for $3.99 each.

YouTube, the free Internet video service owned by Google Inc., offered the rentals between Jan. 22 and Jan. 31. The movies were either shown at last year’s Sundance Film Festival or at this year’s event, which also ran from Jan. 22 to Jan. 31. YouTube sponsored the film festival.

“We are pleased not only with the results, but with the promise,” says a YouTube spokesman.

YouTube plans to expand its paid content to include offerings related to health care and fitness, anime and education, along with movies. YouTube will work to attract more independent filmmakers interested in gaining a wider audience for their work, says the spokesman. He declined to say whether it is negotiating with movie studios to bring more paid content to the site.

Any move by YouTube’s to offer a wide range of paid content would put Google in direct competition with such online entertainment retailers as Netflix Inc. and Blockbuster Inc., as well as with Apple Inc., which sells filmed content through iTunes. Paid rentals enabled customers to stream Sundance movies from the YouTube site for 48 hours without having to watch ads.

So far, YouTube’s foray into paid content streaming is miniscule compared to other companies in the arena. For instance, Netflix, No. 18 in the Internet Retailer Top 500 Guide (a PDF version of the company’s financial and operating profile can be ordered by clicking on its name), says 48% of its more than 11.8 million paid subscribers streamed a movie or TV show during the fourth quarter, up from 41% for the same period in 2008.

The paid rentals did attract some predictable comments from YouTube visitors complaining about having to pay for content on a site that is famously free, says the spokesman. “That was no surprise,” he says. “But we are bringing more options to the table, not telling the YouTube community that they can’t watch videos for free.”

YouTube’s pricing model will give filmmakers and producers a say in how much consumers should pay for their content, with the price potentially dropping over time as interest in a movie wanes, the spokesman says. The model resembles the one Google will use for its Google Editions bookstore, with Google splitting revenue with content providers, who generally will set prices.

Google has yet to make much money off YouTube, which the search engine bought for $1.65 billion in 2006. “We have yet to realize significant revenue benefits from our acquisition of YouTube,” Google said in a quarterly filing in November to the U.S. Securities and Exchange Commission.

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