A recent report in The Financial Times indicates that Google is in talks with some big studios in Hollywood, to show their movies on YouTube on a pay-per-view basis.
It is believed that users will be charged at the rate of about $5 per movie which they stream.
Google used to offer a video on demand service through Google Video, but that has been discontinued since 2007, and users have been expecting a similar service to be restarted. Google has been considering this move since April 2009, when they announced that they would start a payment mechanism for their video sharing site YouTube. The talks with the studios have however warmed up in recent weeks. YouTube has already run a test of this service in January this year with the Sundance Film Festival
Once the service actually starts, Google will be in direct competition with both Apple and Netflix, as it has been reported that Apple is already working on a new digital video service which may be available on the next generation of the Apple TV.
In the meanwhile Netflix has already made a five year deal with companies like Paramount, MGM and Lionsgate for about $1 billion.
Walt Disney, News Corp and NBC Universal also have an online video service called Hulu which is considering an Initial Public Offering of $2 billion.
While the sources for this information have not been revealed by the Financial Times, it is believed to have come from people who would know about such developments. A YouTube representative says, “We have nothing to announce at this time.”