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YouTube to Rent Movies?

YouTube (s GOOG) is in talks with Hollywood studios about renting movies through the video-sharing site, according to the Wall Street Journal‘s sources. From the Journal:

Now YouTube is talking to Lions Gate Entertainment Corp. (s lgf), Sony Corp. (s sne) and Warner Bros. about integrating newer titles into the existing YouTube site, most of which it would carry a rental charge. In some cases, these titles might be available on the site on the same day that they come out on DVD. It is unclear to what extent older movies or television shows will be part of the new agreements.

Movies would be streamed and would reportedly cost $3.99 (though the Journal doesn’t say it, at this price point, movies would probably be in standard definition) to keep it on par with other rental services like Apple’s (s AAPL) iTunes and Amazon VOD (s AMZN). There could even be instances in which YouTube streams the movies for free with advertising.

Interestingly, the Journal says a test will be conducted with 10,000 Google employees, which would be half of the search giant’s workforce, according to Hoover’s data. The test was supposed to start this September but was delayed as negotiations continued.

Google CEO Eric Schmidt indicated in April that YouTube would experiment with “micropayments and other forms of subscription models,” so if true, this news would certainly fall in line with that.

YouTube has been pushing its way into premium full-length content for a while now, but success has been a mixed bag. The video site streamed Sony movies like Ghostbusters via Crackle, and also has existing partnerships with MGM and Lionsgate. Two recent deals with Warner Bros. (s TWX) and Disney (s DIS) resulted in only short-form clips. The site did recently run in full through Sony’s Crackle.

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