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Summary:

Indie filmmakers looking to YouTube as a possible new distribution outlet might want to think twice, based on weekend returns from the video site’s new movie rental service. Last week, the online video site teamed up with the Sundance Film Festival to make a small selection […]

Indie filmmakers looking to YouTube as a possible new distribution outlet might want to think twice, based on weekend returns from the video site’s new movie rental service. Last week, the online video site teamed up with the Sundance Film Festival to make a small selection of critically acclaimed full-length films available for rent for 48 hours.

But, despite a post on the YouTube blog and pickup from various tech blogs, very few users have actually taken YouTube up on the offer. Based on a quick look through the movies that were made available, it appears that YouTube viewers rented the five films less than 1,500 times in total, or an average of 300 times each. At $3.99 a piece, that means the indie films generated less than $6,000 in total sales over the course of the weekend, or about $1,200 per movie — and that’s before YouTube took its cut for hosting the files.

Video Views
Bass Ackwards 308
Homewrecker 308
The Cove 303
Children of Invention 301
One Too Many Mornings 250

That’s bad news for the films involved, and could be bad news for YouTube, which is looking for new ways to monetize videos through sales and rentals. While the films are independently produced and haven’t generated the same amount of buzz as some Hollywood blockbusters, the low view counts are surprising, given the buzz before the film festival and prominent “featured” placement from YouTube.

The good news for YouTube is that it’s still expected to become profitable this year. In a recent research note, Barclay’s Capital analyst Doug Anmuth suggested that YouTube would add to Google’s bottom line for the first time in 2010, with revenues growing more than 55 percent year-over-year to $700 million.

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  1. While the numbers are not large, I do not believe that they are indicative of whether or not this business will be profitable. These movies likely generated more rental revenue through youtube than any other online outlet would have generated. These are niche movies, and independent films generally have very low sales and rental volume. I think this business has the potential to be very significant for Youtube if they are able to sign up enough quality content,

  2. Lance Heiskell Monday, January 25, 2010

    Plus, it’s only been a few days. How fickle do you think netizens are? Give it a month and then do the analysis.

  3. “This video contains content from New Video Group, who has decided to block it in your country”

    Here’s why sales are low….. G-e-o Discrimination….

  4. This is no surprise.

  5. Have you been to Youtube at all? It’s populated instead by juveniles making rude remarks and posting dumb “parody” clips or misnamed videos of nothing in particular. This isnt exactly indy film festival central nor the profile of folks who will pay money for content.

    So this is mostly a case of right idea, wrong place entirely.

    And then you add in the factors like someone mentioned above of rights blocking geographically, for film fans outside the US eg in European countries. Whom ironically enough are probably the biggest market for this kind of online service.

  6. Jeremy Campbell Tuesday, January 26, 2010

    I’m very surprised actually, but I suppose these are unknown indie movies. If YouTube can work deals with major Hollywood studios this pay model could work in time. Pretty stiff competition in a crowded market though.

  7. Hey Ryan… Do you know if they are showing total views for all rentals? I know that their views count is usually behind quite a bit… Additionally, I dont know how anyone would have known about this new feature (outside of some blog posts) even if they were interested. Very difficult to say so far whether this is successful or not in my book

  8. YouTube Users Pass on Paying for Movies « Canadian Media Policy Portal Tuesday, January 26, 2010

    [...] } YouTube Users Pass on Paying for Movies. Categories: general, internet, television Tags: independent filmmakers, online for rent, [...]

  9. YouTube Movie Rental Experiment Fails (So Far) – News: Everything-e Tuesday, January 26, 2010

    [...] Ryan Lawler took a look at how many views each of the Sundance videos had chalked up as of last night.  The totals were sad, with Bass Ackwards, Homewrecker, The Cove, Children of Invention, and One Too Many Mornings receiving 308, 308, 303, 301, and 250 views, respectively. This indicates an almost extreme disinterest on the part of YouTube users; lots of random clips that haven't been mentioned on the YouTube Blog and in various places all over the Web attract more viewers. There could be a few valid excuses for these numbers, however.  First is the simple idea of the view counters getting stuck, and of the five videos, YouTube's only indicating that one has received additional views since Lawler performed his analysis, so this is a real possibility. The second issue relates to YouTube's country restrictions.  In response to the YouTube Blog post announcing the movie rentals, several commenters have complained about geographic blocks, so there may be a sizable international audience that's been shut out. Finally, it's possible that the movies are just bad (at least by YouTube users' standards).  Ratings have been disabled for two of the films, and the other three are averaging roughly two out of five stars. This last explanation wouldn't salvage the current experiment, of course, but it might be that the general concept of renting movies through YouTube hasn't quite run into a brick wall. [...]

  10. I think YouTube needs to put a “Vevo” wrapper on a community like this if they’re going to be successful. Right now, the films are mostly lost in the din of YT… I think the idea will be useful, especially when it’s a download to your TV. This will be the same dealy as NetFlix eventually.

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