Google (GOOG) is going Hollywood -- and it's using Tinsel Town's traditional nemesis, YouTube, as a way in.

Google is in talks with the major movie studios about a new pay-per-view video offering based on YouTube, according to a new report in the Financial Times. The article quotes "one executive with knowledge of the plans" as saying:

"Google and YouTube are a global phenomenon with a hell of a lot of eyeballs -- more than any cable or satellite service. They've talked about how many people they could steer to this...it's a huge number."

Even as Hollywood titan Viacom (VIA), which owns Paramount Pictures and Comedy Central, appeals Google's $1 billion YouTube legal victory, top Tinsel Town executives are getting cozy with the search juggernaut, the article suggests. Google has insisted that YouTube, the free video site it purchased for $1.65 billion in 2006, would be profitable eventually. YouTube has been testing streaming video rentals -- not downloads -- since the beginning of the year, the paper reports, citing a potential price of $5 per movie rental.

YouTube and Studios: It's Complicated

Using YouTube as a platform to launch a pay-per-view streaming movie service is mildly ironic given that many in Hollywood -- led by Viacom -- insist to this day that YouTube only gained its amazing growth on the backs of their copyrighted content, like The Daily Show and The Colbert Report. But Viacom's lawsuit targets YouTube circa 2006 -- and alleges no grievance toward present-day YouTube.

"Maybe the parties could have accelerated the timing of new streaming options if they had poured their litigation dollars into innovating rather than their lawyers' pockets," says Eric Goldman, director of the High Tech Law Institute at Santa Clara University School of Law.

Goldman notes that Google has spent a whopping $100 million and counting on its legal defense of YouTube.

Meanwhile, Hollywood can't just ignore YouTube's potential -- it dominates online video, and despite talk of a $2 billion public offering of Hulu, Fox and NBC's ad-supported video service, YouTube is still the Internet video kingpin.


Google-Apple Battle Brewing

It's no secret that Google is ramping up its Google TV campign, with a vision of essentially merging the divide between desktop computer and television by delivering broadband content viewable on the big flat-screen TVs that get cheaper by the month. Netflix (NFLX) and Apple (AAPL) already stream vast movie catalogues to users -- now Google wants to play.

In fact, on Sept. 1, Apple is preparing to roll out an updated version of its Apple TV product, which has languished despite much initial fanfare.

Apple's iPhone already goes head to head with mobile phones that use Android, Google's mobile operating system, which is spreading like wildfire. Now, Google and Apple are competing on multiple fronts, including streaming music and movies to your living room -- and that's good for consumers.

Google Searching for Hollywood

With everyone from telecom and cable giants like Verizon (VZ) and Comcast (CMCSA) to Google and Apple focused on high-speed broadband content delivery to the home, Google's move to get friendly with the major movie studios makes sense. Google certainly has the wherewithal and influence to make a play for consumers' living rooms.

"There's a big opportunity here for Google to embed its technology into televisions," Kurt Scherf, a principal analyst at research firm Parks Associates, told me in May when Google TV was announced. "Google has the scale and the ability to target users and serve up ads that other players lack."

And the search giant does have entertainment ties: Google board member Ann Mather, who joined in 2005, is a Hollywood veteran who held senior positions at Paramount, Disney (DIS) and Pixar, and was instrumental in Disney's purchase of the digital animation juggernaut.

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11 Comments

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dickn2000b

$5 to rent a movie? NO WAY! This will never work.

August 31 2010 at 1:08 PM Report abuse rate up rate down Reply
AnimeRp_Emi24601

youtube was supposed to be a FREE place to upload and watch videos. Youtube is good advertasing for some movies, tv shows, etc. There's no reason to make people pay for movies or shows that people can watch from other movie providers like Netfix, Redbox, Time Warner Cable, etc. People want what is good and cheap. Pay per view may be good with HD, but it's not cheap.

August 31 2010 at 12:09 PM Report abuse rate up rate down Reply
jmharts08

I know the Answer!Go to Redbox for $1-since most of the Movies are only worth watching 1 time.

August 31 2010 at 11:49 AM Report abuse +2 rate up rate down Reply
aglasier

This is exactly how Nazi Germany started; a bunce of lieabouts with nothing better to do than to cause trouble.!!

August 31 2010 at 11:44 AM Report abuse +3 rate up rate down Reply
sinny

It's ok someone will come up with another user uploadable site. When Napster went down limewire and others popped up in it's place. Now that those are gone others are being created. These sites might be harder to find of course but they'll exsist. I am done with Google, and can't stand Bing so I guess it's Fire Fox for me until something better comes along. I miss the days when the internet could be almost anything too bad greedy big business have ruined another opportunity for the common person to express themselves.

August 31 2010 at 11:30 AM Report abuse +2 rate up rate down Reply
Gary You Rock

I am going to repeat what many others are saying already. You have to be an idiot to pay per movie on you tube when you can watch over 12,000 movies on NETFLIX for 9.00 a month. I LOATHE the fact that big business is trying to cash in on everything free on the internet..People you really need to SPEAK UP ABOUT THIS!!! WAKE UP ...DO IT NOW

August 31 2010 at 11:27 AM Report abuse +2 rate up rate down Reply
BETTYE J.

They might as well have pay for view on you tube, since they have about everything else. It would make is easier to just keep a library of all the movies you buy.

August 31 2010 at 11:20 AM Report abuse -2 rate up rate down Reply
Marilyn

I can get almost any movie I want On Demand for $5.00 with my cable service, and watch it whenever I want within 24 hours on my big screen TV and in the comfort of my living room. Why on earth would I pay the same amount to watch something on my much-smaller computer screen in far less comfortable surroundings? I hate that Big Business is trying to cash in on everything good and FREE on the internet! Leave it alone!

August 31 2010 at 10:24 AM Report abuse +6 rate up rate down Reply
sputinc7

WHAT KIND OF IDIOT WOULD PAY $5 A POP FOR MOVIE STREAMS WHEN YOU CAN GET THEM FOR $9 A MONTH FROM NETFLIX? THESE GUYS GOTTA MOVE INTO THE 21ST CENTURY. PEOPLE DON'T WANT CABLE, IT COST TOO MUCH. WE JUST WANT EVERYTHING CABLE HAS PLUS ANY MOVIE ON DEMAND AS A STREAM FOR ONE LOW MONTHLY FEE. SIMPLE ISN'T IT? UNTIL THESE GUYS FIGURE OUT WHAT PEOPLE WANT AND GIVE IT TO THEM INSTEAD OF TRYING TO PUNISH THEM FOR WANTING IT, THEIR REVENUES WILL CONTINUE TO GO DOWN. THAT'S JUST THE WAY IT IS. I WOULDN'T MIND A FEW... FEW COMMERCIALS IF IT KEEPS THE MONTHLY FEE DOWN. ANYTHING OVER $20 A MONTH FOR STREAMING CONTENT IS A RIPOFF AND EVERYBODY KNOWS IT. HOLLYWOOD PEOPLE DON'T NEED THE OUTRAGEOUS FORTUNES THEY COMMAND, AND THAT IS WHY WE CAN'T GET WHAT IS INEVITABLY COMING. UNTIL THEY GET OVER THEMSELVES AND MAKE A FAIR WAGE, PIRACY WILL CONTINUE AND THREATEN THEIR INCOME THAT WAY. LIKE IT OR NOT, EVERYTHING FOR ONE FEE ONLINE IS GONNA BE THE FUTURE OF ENTERTAINMENT. IT'S JUST A MATTER OF WHO GOES FIRST.

August 31 2010 at 9:53 AM Report abuse +4 rate up rate down Reply
Ben

Made in America is very important because manufacturing employs workers! Once we let all or most of our manufacturing base move to China, they will own us and we will have unemployment like we have never seen. Manufacturing builds wealth. Not everyone is suited to work in a call center....oh, I forgot, the call centers are being moved to India. Well, looks like the future is pretty bleak for us unless someone steps in and stops the shifting of American jobs overseas!!!!!!!!!!!!!

August 31 2010 at 9:27 AM Report abuse +5 rate up rate down Reply