YouTube conducted its first test of a video rental service last month with five independent films from Sundance Film Festival. In the ten days of the test, the rentals received a total of 2684 views, according to the New York Times. At $3.99 a pop, YouTube brought in $10,709.16.
If YouTube could sustain both of those rates on rentals at large, they’re looking at more than $390,000 a year in revenue. That’s
close to offsetting waaaay off the largest loss estimate from last year and more than enough to turn a profit if even the more conservative loss estimates.
The original blog post announcement doesn’t say how much of the revenue, if any, will be shared with the independent filmmakers. The additional exposure may be worth the money to the filmmakers, of course.
But to expand the program with large studios, YouTube will doubtlessly need to share revenue, cutting into their profits. YouTube first has been rumored to be discussing rentals with major studios (or free showings) for months. They already have a number of content deals in place with studios including Disney, MGM, and Lions Gate.
As always, we’ll end with the question: Do you think this is the way YouTube will make the big bucks?