Last night, news leaked that YouTube  was in talks with major movie studios like Lions Gate, Sony, MGM, and Time Warner to begin renting movies as soon as they were available on DVD. The full-length films would be available for rent for as little as $3.00, and would compete directly with Netflix's "instant" movie streaming, Amazon's VOD, Hulu, and iTunes movie rentals.
While Google won't comment openly about the project, it's said to be pilot testing the project with 10,000 of its own employees while it refines the interface and movie library that will be available. The deal would represent a tacit acknowledgement on the behalf of the movie studios that DVD sales are in free-fall, and that they are desperate to stem the revenue ebb.
YouTube has come a long way since being sued  by Viacom in 2007 for $1 billion for "brazenly exploiting" pirated material. But the side has shown a different side of late, test-screening official copies of films like Ghostbusters and Spider-Man with ads in tow. YouTubers have flocked to the videos in droves. The site gets over 400 million visitors a month.
Now there's also news that YouTube's technology platform will be the backing of a startup called Vevo , an online music video repository supported by Universal and Sony; Warner, and EMI are "in talks" with the site. The "Hulu for music" is said to be launching in December, and will be separate from YouTube, which is already a go-to music video source for many fans. Interestingly, CBS and NBC are reportedly also in talks with the site to develop Web shows, which will make Vevo something of an online MTV competitor.
But YouTube has an image problem. It's known for bad quality, mediocre search and absolutely asinine user comments. Says one commenter on MacRumors: "They would never be my goto [sic] place to rent a $4 movie."
Another user points out that load times can vary wildly, and that the longer clips seem to suffer most.
Another roadblock to adoption will be YouTube-to-TV connectivity. While some DVD/Bluray players and HDTVs already offer this, and there are workarounds that let YouTube stream via XBox , PS3, and Wii, the fact remains that the YouTube experience is primarily a PC-based thing. As one NeoWin user put it:
None of this would matter, of course, if the videos were free. But YouTube's freeness is a major element of its image, and while there are plenty of YouTube account holders, not a single one of them is accustomed to using that account to spend money. Payments for the $4.00 videos will likely be processed via Google Checkout, and since Checkout isn't terribly popular, that means a lot of first-time users will need to go searching for their credit card before sitting down to watch. That might drive them into easier avenues, many of which--like iTunes and Amazon--already have their payment information on file, ready for one-click buying.
It's also impossible to understate the dissuasive nature of the YouTube community. Hulu and iTunes feel slick and civil; Amazon, while not the prettiest site, is quick and trustworthy. Netflix inspires nothing less than love in its customers; just see Monday's TechCrunch paean  for proof. And this is to say nothing of real-life service RedBox, which has garnered an incredible following by making DVD rentals available for $1 in many of the places you already go. Would you rather float to Hulu, fire up Netflix on your Roku or DVD player, or log onto YouTube and wade past comments like this:
And this is the YouTube user help forum, not even the gen-pop user comments--which are mostly too racist and obscene to reproduce on this site.
Given a choice, why would anyone give their $4.00 to YouTube?