Google to challenge Apple's iTunes for VOD market control

PanARMENIAN.Net - After reportedly finalizing deals with several major movie studios, Google is set to launch on YouTube a Video on Demand movie rental service that will challenge Apple's iTunes movie store for control of the VOD market.

YouTube began offering movie rentals last year, but had yet to rent mainstream movies, instead offering movies mostly from independent studios. Google plans to build out the service with the imminent launch of a movies on demand service from the major Hollywood studios, according to Apple Insider.

The report says Google has successfully negotiated deals with major studios including Sony Pictures Entertainment, Warn Brothers and Universal, though "knowledgeable executives" indicated that Paramount, Fox and possibly Walt Disney have declined to participate at this time.

Google has quietly begun adding mainstream movies to YouTube, with rentals ranging in price from $1.99 to $3.99. "We've steadily been adding more and more titles since launching movies for rent on YouTube over a year ago, and now have thousands of titles available," a YouTube spokesperson, while declining to comment on the rumored major studio launch.

According to the report, movies will be made available on YouTube the same day they can be rented at video stores or iTunes, ahead of subscription services like Netflix.

Research group IHS revealed earlier this year that Apple had maintained a 64.5 percent market share of the online VOD 2010, while losing some share to Sony and Microsoft. In 2009, Apple held 74.4 percent of the online movie market, which doesn't count subscription services like Hulu or Netflix.

In the recent March quarter, Apple generated a record $1.4 billion in revenue from the iTunes online store, though it's unclear what portion of that figure consisted of movie rentals.