Worse yet, Google plans on raising prices to $5 per film, according to The Financial Times. If $3.99 didn't work, why does Google think $5 would? Granted, premium content will receive more views, but Google has a spotty track record in the rental biz, and raising prices doesn't seem like the best solution.
YouTube Videos Streaming Only, No Download Option
The movie rental industry is still popular. Redbox is a great example: as a company, it is seen as "destroying" Hollywood with its $1-per-night DVD pricing model. But when it comes to online content, many people want to own what they buy -- which is why Apple had to ditch DRM on iTunes. Google doesn't seem to grasp the concept of video ownership. According to The FT, these YouTube videos will be streaming-only with no option to download. This also forces YouTube renters to have an Internet connection at all times, eliminating portability.
On the plus side, downloading YouTube videos has never been a problem before, so even if Google encrypts its films, I imagine clever hackers will find a way around it.
Competition Heats Up, Lower Prices Likely
There's also Amazon Video on Demand (with Disc+ on Demand), iTunes sales and rentals (including low-priced TV shows coming soon), Hulu Plus, and Netflix's streaming service, which is still as little as $9 per month, plus physical discs. Also, Netflix may soon offer a streaming-only subscription, which would drive its prices even lower.
The winner of the online video battle will be determined by who can offer the most content for the lowest price. Don't forget all the free video sites on the Internet, and the underground download market.
Cable TV Won't Die
Cable TV subscribers will also resist paying twice for the same content. If a subscriber buys Showtime to watch show Weeds, they won't want to pay Hulu Plus' price for the same access. Similarly, if a subscriber has HBO -- and access to HBO's own streaming site, as well as on-demand movies -- there's a good chance they'll stay away from purchasing anything from YouTube.
This story, "4 Reasons Why Pay-Per-View YouTube is a Hard Sell" was originally published by PCWorld.