Studios, YouTube Seek Premium Distribution Deal

LOS ANGELES — Major motion picture studios, long suffering from many of the same dwindling sales and other issues impacting many adult studios, are looking to YouTube to fill a gap in their distribution chain.

According to the Wall Street Journal, YouTube is reportedly discussing premium content streaming with studios such as Lions Gate Entertainment, Metro-Goldwyn-Mayer, Sony and Warner Bros., with plans to offer the VOD versions of first-run films as soon as the DVD/Blu-ray versions are released — if not sooner.

The move is seen as a way for content producers to bolster their bottom lines in the face of a sagging physical media market, which has endured annual double-digit declines.

While it is unclear if YouTube's core market, trained to expect content to be freely available on the Internet, will embrace having to pay a rental fee in order to view certain videos; it is clear that Hollywood and beyond is trying to monetize a shifting marketspace and rapidly evolving consumer demand — and for many studios it seems, partnering with Google-backed YouTube may be the best way to establish a new — or leverage — an existing online presence.

Although Hollywood has been hesitant to release features online, where piracy is rampant and downloads can cannibalize DVD sales, the current market realities are compelling the studios to take action — even if it means hard choices as to timing and the scope of these efforts, as well as where YouTube would fit into a particular distribution chain.

Retail pricing would reportedly be in line with iTunes, or around $3.99 per movie; with the revenue share said to be 70/30 in favor of the studio.

Expectedly, response to the news was mixed among YouTube users.

Commenting on the LA Times blog, "Gihan" wrote in opposition to the move, stating that "YouTube is a place for us amateur film makers to express ourselves and showcase our hard, meaningful work. We don't have millions like these studios do; we have our digital camcorders, some friends and a YouTube account … don't take over and destroy us aspiring directors/producers/screenwriters/actors etc."

"Steve," however, offered an alternative view, stating that "Finally these morons are starting to get it, this is the future of media."