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Taking Jab at Netflix and Hulu, YouTube Will Now Offer Hollywood Movies for Rental (GOOG, NFLX)


Google (NASDAQ: GOOG) isn't letting Microsoft's (NASDAQ: MSFT) rumored bid for Skype get in its way Tuesday, as the video site is expected to announce that more than 3,000 Hollywood movies will be available for rent.

The move is an obvious attempt to move into the territory of Netflix (NASDAQ: NFLX) and Hulu, which both provide streaming-video offerings.

According to a Reuters report, "Google Inc-owned YouTube is offering a mix of recent Hollywood blockbusters, independent and foreign movies for 99 cents up to $3.99 each. These include last year's Oscar winners "The King's Speech" and "Inception" alongside classics including "Scarface" and "Taxi Driver." Most of the movies on the site are priced around $2.99."

Some investors have questioned the extent of YouTube's profitability, and this announcement could be seen as a long-overdue way to profit on the website's popularity.

Notably, "YouTube signed deals with major studios including Time Warner Inc's (NYSE: TWX) Warner Bros, Sony Corp'sJ Sony Pictures (NYSE: SNE), Comcast Corp's (NASDAQ: CMCSA) Universal Pictures and Lions Gate Entertainment (NYSE: LGF)."

Most movies will be available to watch for 30 days after renting, and will be available for 24 hours after consumers begin watching.

YouTube certainly generates considerable revenue through ads, but Google will likely want to capitalize on the content-based model of other media companies.

The Reuters report notes that "The goal for YouTube is to drive more views of its videos which, in a fast-evolving Web content sector, need to offer better production values to compete against paid professional offerings from the likes of Hulu, Netflix Inc and websites CBS (NYSE: CBS), Walt Disney Co's (NYSE: DIS) ABC and other broadcasters."

Shares of Google closed higher by $2.38 on Monday, to $537.68.

Posted-In: Reuters YouTubeNews Movers & Shakers Events Tech General


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