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Analyst: YouTube Movie Rental Bow a Dud

25 Jan, 2010 By: Erik Gruenwedel

YouTube’s much-hyped foray into movie rental streaming featuring five independent films from last weekend’s Sundance Film Festival received the following rating from one critic: Box-office bomb.

The titles, which are from the 2009 festival and this year’s edition, include The Cove, One Too Many Mornings, Homewrecker, Children of Invention and Bass Ackwards, and are available as standard-definition and high-definition downloads for $3.99 each for a 48-hour viewing window.

Just 72-hours after launch, 1,422 viewers had paid a combined $5,673.78 to rent the five titles, including 303 views for The Cove, 301 for Children of Invention, 298 for Bass Ackwards, 279 for Homewrecker and 241 for One Too Many Mornings, according to MotleyFool.com analyst Rick Munarriz.

“Ouch! If Google is giving the filmmakers roughly two-thirds of the take … each of the five productions will walk away with just hundreds of dollars for their role as video-sharing pioneers over the weekend,” Munarriz said in a post.

The analyst said the social network behemoth is discovering the challenges Apple, Blockbuster and Amazon have encountered in attempting to deliver movie rental streams and compete with Netflix. The online DVD rental pioneer, which claims that 50% of its 11 million subscribers watch at least 15 minutes of streaming per month, offers streams of select catalog titles as a value-added feature to new and existing monthly subscribers.

“It was easy to predict that YouTube’s user base wouldn’t warm up to paying $3.99 to rent … films,” Munarriz said. “Folks approach YouTube as an outlet for short — and free — clips.”

Google spokesperson Chris Dale said it would be a mistake to compare the performance of five independent films on YouTube to Hollywood blockbusters on opening weekend.

Dale said that of the 9,000 films submitted to Sundance in 2009, about 53 titles found some form of distribution. He said the initial focus of YouTube movie rental streams is the independent filmmaker who creates “amazing works” on a micro-budget without any assurance their project will be picked up and distributed.

“Our goal is to give these filmmakers a new distribution option where they can control their own destiny,” Dale said. “Finding an audience, or extending an audience online, even if it starts out small, is a very positive thing.”

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