Blog Post

YouTube Store Still Tanks, Despite Oscar Fare

Stay on Top of Enterprise Technology Trends

Get updates impacting your industry from our GigaOm Research Community
Join the Community!

Consumers still aren’t warming up to YouTube’s (s GOOG) video rentals, even with the site offering critically acclaimed movies like Precious: Based on the Novel Push by Sapphire, Reservoir Dogs and 3:10 to Yuma as paid streams. YouTube added titles from Indie powerhouse Lionsgate to its rental offering last week, but consumers have yet to bite: Precious, which received two Oscars at the 2010 Academy Awards, has just seen 1421 rentals in one week.

YouTube opened up a dedicated store front last week at (note: only accessible in the U.S.). The site also recently stopped displaying the play count of rental titles on its site. However, we were able to obtain numbers for many of its rental titles, and they explains why YouTube would be secretive about these details: 3:10 to Yuma, as one example, was only streamed 53 times in one week.

YouTube started to experiment with movie rentals in January when it offered a few Sundance titles for $3.99 each. Its users weren’t impressed by the offering, which allows them to stream a movie for 24 to 48 hours, with each title only seeing around 300 rentals over the course of their online opening weekend. YouTube told the New York Times back then that these were actually pretty good numbers for largely unknown independent films.

However, it doesn’t seem like having more popular fare is making any difference. Horror Blockbuster Saw has only seen 40 rentals on YouTube, and Tarantino’s Reservoir Dogs has only been viewed 101 times, despite being offered for a discount price of $1.99. Here’s a list of the ten most popular movies of YouTube’s rental store, with yesterday’s play count:

  • Precious – 1421 views
  • The Cove – 1344 views
  • Running Down A Dream – 817 views
  • Bass Ackwards – 536 views
  • Brothers – 514 views
  • One Too Many Mornings – 394 views
  • The Socalled Movie – 357 views
  • Roman Polanski: Wanted and Desired – 289 views
  • The September Issue – 287 views
  • Air Guitar Nation – 235 views

Altogether, these movies have just seen about 6200 rentals in a week’s time.

YouTube’s other rental store categories haven’t exactly been cash cows either. Anime shows generally have only gotten a few dozen views per episode max, and educational fare seems to do even worse. There’s one genre that seems to do fairly well: Bikini Destinations, a travel show featuring women in swimwear, has seen a few hundred rentals per episode.

YouTube’s Communications Manager Anna Richardson didn’t want to comment on those numbers, but tried to put a positive spin on the overall performance of the store. “It’s going really well so far,” she said, adding that this is just the early beta of YouTube’s rental program and that there hasn’t been any proactive outreach to potential customers yet.

Related content on GigaOm Pro: Slow and Steady, Netflix Pulls Ahead in Streaming Video (subscription required)

37 Responses to “YouTube Store Still Tanks, Despite Oscar Fare”

  1. What I don’t understand is why someone’s money from the UK or Canada or anywhere else in the world is no good as far as this service is concerned.

    If some guy in Sydney wants to spend his money to watch your movie, why would you not want to take it?

  2. I’m not sure if Google needs music to get those CC numbers. VOIP could be another avenue. Google Talk isn’t really that much of a draw right now, even though it works fairly well for international calls, especially on an Android phone. However, once Google is gonna relaunch Gizmo as a Google Talk soft phone, a lot of Skype customers might jump ship. And yes, having those CC numbers could help to sell content.

  3. totalizer

    Google’s little pieces all add up to one tremendous infrastructure/platform play. They move slow, but no reason to think they can’t work it out. Getting people to pay for something/anything on Youtube is a good first step. Android makes Google Checkout customers of all that platforms users, now they’re introducing them to paying Google for things, slowly. Getting all those CC’s is the real hump. Once you have tens of millions of registered users with CCs on file your platform as a tool for paid consumption has much less friction. Android is a Google Checkout/consumer consumption trojan. Youtube rentals/subscriptions are going to be the second leg of that.

    From a business pov, they really need some kind of music service, either lala-esque or subscription based. Not because in itself would be that important, but as a third leg. To make Google Checkout and the consumer platform that much more inviting.

    Apple did it with music to video to phone. Google is going to be exactly the opposite, phone to video to music.

  4. Screenguy

    Not a shill – just someone that knows what’s up with the industry. I’m not here to sing google’s praises – clearly they have a lot of work to do. They just happen to have done a lot of the things vie been looking for as a distributor, and I happily embrace any new viable outlets.

    That being said, the’re no clear “WalMart of digital video” right now – as I noted earlier, the industry is still in flux, and Google has as good of chance as any to hold a dominant position. so does apple, and amazon. I hope they all succeed because I don’t want to see market share consolidation like we do with the music Industry…

  5. Shawn

    Screenguy definately sounds like a shill, I don’t know about Amazon et al but I do know 55%(~7 million) of Netflix subscribers have tried streaming. People prefer a buffet style of streaming instead of a-la-carte. Paid VOD on YouTube will never take off for several reasons:
    1. It uses Flash, Silverlight is a better platform to watch on.
    2. People are use to watching free video content on YouTube.
    3. The average age of YouTube viewers is 16 years old, they don’t have credit cards to pay for VOD.
    4. Most people prefer to watch movies on their tv, there are many devices to watch streaming movies on(Roku, Blu-ray players, etc).

    • What makes silverlight a a better platform? I don’t know about the pay section of youtube but the free section has an HTML5 beta… give me open standards any day. Then I don’t have to worry about MS tech not being supported by a large group of devices.

      As far as devices hooked up to TVs, as long as its an open standard anyone can support it. Give me xbmc/boxee over roku or overpriced BD players any day.

  6. Carlos

    Why would anyone in the United States want to rent a movie from a corporation that allows foreigners to block their own country for a buck? What American would want to contribute to the cash flow that pays for that?

  7. hmm, I noticed embedding is disabled… and you can’t preview a fair-use 20sec clip that reviewers might want to show? Now that is no way to help spread these videos to potential renters. Fix those two simple issues and sites all over the internet will help rent these movies for youtube…

  8. Screenguy

    First off, consumers do see the value of four dollar rentals – the vast majority of them happen on cable vod. Netflix, Hulu, etc. Compete on a time basis, but not from a content standpoint. If you want to rent Sherlock Holmes, you can get it on vod or the major download sites. I work in digital distribution, and based on what we see so far from google, I’m pleasantly surprised. These numbers are larger than what I see on Amazon, and they’ve had their offering available for years. If I have a library of films up on google at this level of turns, i wll see hundreds of thousands of dollars in revenue annually. This number will continue to grow as google adds studio content, does some ce integration, and launches an android movie/tv store.

    Keep in mind – that iTunes number you noted included all content downloaded, including heavily discounted and free downloads. Google could catch up easily since Apple has no real living room strategy – if you want to talk failure, let’s not forgot that little”hobby.”

    Internet vod will be turned around when there is a critical mass of media consumption devices with Internet connectivity. People aren’t watching movies on phones, but they will on connected tvs, bd players, and tablets. Google is better positioned to dominate those platforms with android (open and free -no upfront cost to ce manufacturers). That’s where these movies are going to be consumed, not in a browser.

    Their goal was to prove to distributors that adding YouTube to their growing list of outlets could be an automated process at no additional delivery costs – and the site is already generating revenue in beta with zero marketing. This is a success in my book, and I am planning on delivering many, many more titles in the coming weeks to them.

    • GoogFriend

      Nice shill for the Goog. It’s clear you work there.

      “Google is better positioned to dominate those platforms”
      Better than who? The web?
      “That iTunes number you noted included all content downloaded, including heavily discounted and free downloads.”

      Right, and it was only $291M. Goog isn’t turning that around, no matter how free android is.

      “Their goal was to prove to distributors that adding YouTube to their growing list of outlets could be an automated process at no additional delivery costs”
      …and paydirt. You do work for GOOG.

  9. Screenguy, easelman, I don’t have direct comparison numbers from Amazon or iTunes. Apple did sell close to half a million downloads in two months after bringing movies to iTunes, but it’s hard to directly compare those two.

    However, that’s beside the point. I didn’t didn’t say that YouTube’s download store is doing worse than its competition, it’s just not doing well, period – and that may have a lot to do with consumers not seeing the value of four dollar VOD rentals in the age of $10 Netflix subscriptions one dollar Redbox kiosks, free streaming on Hulu and free torrent sites everywhere.

    Screendigest recently estimated that iTunes and all of its competitors only made $291 million from VOD and download to own in 2009, and that’s for movies and TV shows together. So, yes, the YouTube folks don’t have to feel that bad about selling around 1400 streams for Precious – but it doesn’t look like they’re onto something that could possibly turn the fate of Internet VOD around either.

  10. easelman

    Hmmm, why do you believe that those are small numbers? Can you please publish comparison numbers for iTunes and Amazon and Blockbuster?

    I think we are accustomed to seeing YouTube videos with viewcounts in the millions, but that’s for free ad supported clips. For full-length films behind a pay gate, on a site where users are not yet used to paying, these might be very respectable numbers. And if you do the math (x 52 weeks, x tens of thousands of movies, plus shows, plus long tail), it adds up fast.

  11. Screenguy

    One other thing – YouTube should make the rental store work with the iPad – it would be nice to instantly start watching rentals instead of waiting for them to download.

  12. Shawn

    I agree with Colin but I will add that until YouTube gets rid of Flash I will not watch a movie that keeps buffering every 2 minutes, I have a fast PC and ISP but it still buffers.

    Another problem is I can rent these movies on Amazon VOD, CinemaNow or Vudu and watch them on my HDTV.

    YouTube should stick with free videos.

  13. Screenguy

    You must not be familiar with how things perform on iTunes on a rental basis. In that context, these numbers are actually promising – especially when you consider The lack of marketing and weak selection. In fact, I would wager that when this is inevitably ported to android devices, consumption will be far greater than this, especially when the studios come on board.

    I find it hilarious that this is considered a “failure” when no context is given. Sure, against home video and cable VOD these numbers are weak, but they’re already better than Amazon, Vudu, Playstation and aren’t that far off from iTunes based on my personal, first-hand knowledge of how like titles have performed on those platforms.

    ALL digital sales combined are only 1/20th of the home entertainment market – essentially, it’s the equivalent of 2002-03 on the music side.

  14. The issue here is not Youtube, but the video selection and price. I was not knocking down doors to see Precious before Youtube rental, and I certainly am not now. Put Sherlock Holmes in the mix at $2.99 and advertise it on the home page, and I bet you have a completely different story.

  15. Kevin

    Perhaps I could rent a movie or two if YouTube didn’t permanently disable my account. I’m not going to have two Google logins in order to rent stuff from a site that has no viable method to dispute arbitrary actions.