A report this weekend from the Financial Times kickstarted another rumor-fest surrounding digital media distribution, this time starring YouTube (and, by extension, Google). The rumor, which is sourced from "people familiar with the talks," indicates that Google is in advanced talks with the movie studios, aiming to launch a pay-per-view movie rental service through YouTube. It's not the first time we've heard this rumor, of course—it seems to pop up every few months or so.
The buzz is that such a service would cost about $5 per movie, likely rented for a 48-hour period. What's tricky about this service compared to all other digital movie distribution services (Apple's iTunes, Netflix) is that there isn't currently an officially supported means to get YouTube videos onto your TV. Sure, there are media center OSes like Boxee, XBMC, and Windows Media Center that support YouTube, but none do so with the elegance and ease that such a service requires.
That's where Google TV comes in. Google TV is a major push into the living room from Google, consolidating cable TV, streaming media, and search all into one box—you can read more about Google TV here. What it lacks, compared to other, similar boxes like the Apple TV, is its own service, and this YouTube rental idea could be just what Google TV needs to compete with Apple, Amazon, and, indirectly (as it's not a subscription service), Netflix.
Of course, it remains to be seen if Google TV will be a success. I have my doubts—in my opinion, Google TV is too transparent, failing to unite media from disparate sources into a common interface that makes sense—but a $5-a-pop rental service is a nice addition to the feature list.