Two of the internet's most popular video websites are planning to charge users to watch certain movies and television shows online.
YouTube and Hulu both have schemes to erect paywalls around a limited amount of content in order to drum up revenues that online advertising has failed to provide, according to recent announcements and reports.
YouTube said on Wednesday that it will offer five films from the 2009 and 2010 Sundance film festivals available for online rental. The flicks will be served from this Friday until Jan. 31, when the festival ends.
But the website's modest entry into rentals appears to a warmup to even more pay-per-view offerings. "In addition to these five films, a small collection of rental videos from other U.S. partners across different industries, including health and education, will be made available in the weeks ahead," the Google-owned company stated on its blog.
"Making content available for rent will give our partners unprecedented control over the distribution of their work -- they can decide the price of their videos and the rental duration," the company added.
YouTube movie rentals — as planned thus far — will be available to US users only and will require a Google Checkout account for payment. Prices weren't announced, although Google said it will provide more information in another blog post on Friday.
Citing "people famililar with YouTube's plans," the LA Times reports that in recent months, YouTube has been negotiating for pay-per-view streaming rights to films and television shows. "Within months," the website will begin selling TV and movie rentals from Hollywood studios, the paper claims.
Meanwhile, more rumors of Hulu heading for a subscription service plan have surfaced.
The US internet video site — a joint venture of NBC Universal, News Corp, and Walt Disney — has plans to begin charging for episodes of popular shows, the LA Times said in a separate report. Programs like "30 Rock," "Modern Family," and "House" are prime candidates to fall under a paywall.
One plan under consideration is to allow users to watch the five most recent episodes of TV shows gratis, while requiring a subscription of $4.99 per month to watch older episodes, the newspaper claims. A better idea of the pricing model could emerge within six months, anonymous sources "familiar with the matter" are cited as saying.
Hulu's content providers — which are its parent companies — are under pressure from US cable operators that are struggling to preserve their business model in the age of free streaming TV.
Some suspect that US cable giant Comcast's recent purchase of NBC Universal spells the end of Hulu's free ride. However, the company has publicly denied/a> that establishing a subscription service for Hulu is on its agenda. Rumors of a Hulu Premium service have been brewing well before the NBC Universal acquisition.
Hulu would not be the only one moving to a subscription model to make up for slowing online ad revenue. Internet radio firm Pandora recently began charging users a monthly $1fee if they listen to more than 40 hours a month. On Wednesday, The New York Times announced plans to charge users for access to its website after they read a certain amount of stories. The newspaper said the pay scheme will likely be up and running sometime in 2011. ®