Report: Google in talks for movie rental service

YouTube's fledgling movie rental program may soon be getting some Hollywood muscle in the crowded fight for domination of digital movie and television content distribution.

YouTube-parent Google is negotiating with major Hollywood studios to stream movies from their catalogs on a pay-per-view basis by the end of the year, according to a report in the Financial Times.

The service is expected to stream movies on demand for $5 each, according to the report, which cited sources with knowledge of Google's plans.

A YouTube representative declined to comment, saying: "We have nothing to announce at this time."

The move would put Google in competition with Apple and Netflix. Apple is reportedly working on a new digital-video service perhaps tied to a new generation of Apple TV. Netflix earlier this month signed a five-year deal worth nearly $1 billion to stream movies from Paramount, Lionsgate, and MGM.

Meanwhile, Hulu, the online video service owned by Walt Disney, News Corp., and NBC Universal, is reportedly considering an initial public offering worth $2 billion.

YouTube has long been expected to get into the video-on-demand business, especially since Google removed video content purchases from its (now-defunct) Google Video service at the end of 2007. Google first hinted at its intentions in April 2009 when it announced plans to build payment mechanisms into its video-sharing site. Late last year, reports surfaced that YouTube was in talks with a number of film studios in an attempt to warm them up to the idea of renting out their films on the service.

YouTube first delved into rentals in January with a test in conjunction with the Sundance Film Festival, making five films temporarily available for rental. YouTube had said that other films and programs would be made available for rental in the near future but did not name any partners at the time.