There is a rumour that YouTube i.e. Google is about to launch a movie rental service. As grand and nice this might be in Google’s executives’ heads they are about to be rudely awaken by the reality of the entertainment industry. As it stands, cable operators all over the world are looking into providing on demand movie rental service of some sort. Even if Google manages to get the content rights holders on board with their little scheme they will run into some serious problems with other content providers. Since, in quite a few cases your cable operator is also your ISP Google is going to get blocked all over the place just like they did with GoogleTV. For whatever reason, Google refuses to admit that Apple’s CEO Steve Jobs was indeed very much on the money when he said that creating a TV streaming service/device is a bag of hurt and it comes with some serious challenges which currently cannot be easily overcome. The YouTube service will compete in price no doubt. Well that will not go well with a lot of other providers. And at the end of the day, if I am going to use my computer to watch content, then why on earth would I pay for it when there are countless free sources that I can choose from. Yes 1080p is great but Google seems to forget that most laptop screens (i.e. over 1/4 of all computer screens out there do not actually support a 1080p resolution). On top of that you have another 1/3 of all computers in the world being in household which cannot afford to pay for online content or simply refuse to pay for such. And as a result Google will have to work with a much much smaller group of potential users than they think. Yes youtube is popular but how much of that is due to the fact that it is a free service?
I hate to be a pessimist but I think this would be yet another project that Google might have to scrap eventually.
There are some rays of light however. An increasing number of TVs are coming with a YouTube viewer and that would allow people to rent movies straight from their TV provided that the ISP is not allowed to block the content. However, the player that TVs use might not always be compatible with the latest and greatest of YouTube and would probably need modifications in order to allow for the rented content to play. YouTube will have to introduce a modified player as the current one allows for the content to be downloaded to your computer and played without any restrictions. That would not go well with movie studios. Updating the software on your TV will literally take eternity and I would bet you money that most users don’t even know that your TV software can be updated or that your TV actually does run an operating system. One of the hardest and most expensive things for a company is educating their customers.
It would be interesting to see how the new rental service stacks up in such a complex environment and I honestly hope that I am wrong about it’s future. And for what it’s worth I really hope that Google is not pitching this as an on demand service for computer users and that they have indeed looked at what cable operators currently do.