YouTube may start renting movies, and the MPAA may finally approve

The Wall Street Journal is reporting this evening the internet's most popular video streaming destination YouTube is now in talks with movie studios to offer rental streams of new release movies which could potentially be released day and date with their DVD and Blu-ray counterparts.

The site already works with a number of content owners to host ad-sponsored streams of classic television shows and films, but the site has not yet attempted the rental model with these studios. Details are scant at this point, at the WSJ only cites information provided by unnamed sources "familiar with [YouTube's] plans." A $3.99 rental price is reportedly being discussed because that is the cost of a Standard Definition new release movie rental on Apple's iTunes and Amazon Video on Demand.

At that price point, Google and YouTube should have a much easier time attracting movie studios than Coinstar's video rental kiosk company Redbox, which has been battling with studios over $1 DVD rentals which many studios feel greatly devalue their new releases. Not only will the higher price of the streaming rental appeal to studios, but so will the lower overhead. Streams eliminate the DVD production, pressing, and printing cost and replace it with the cost of bandwidth and hosting, at $3.99 per stream, the potential profit is much higher.

As it is now, the Motion Picture Association of America (MPAA) doesn't really stand behind YouTube. It has applauded the efforts of Hulu, ABC.com, Nick.com, iTunes, and Netflix on Demand, but has balked at YouTube because of its problems with monetizing content.