YouTube, the social networking video sharing community, is said to be in discussions with Sony & Lions Gate Films to offer a Film & Movie Rental service through the YouTube portal.

YouTube, one of the internet’s visited websites, recently announced that it would be offering premium, professionally produced content onto its network in order to attract more users and increase advertising revenue. Last month, as part of an agreement, Time Warner, CNN, Cartoon Network and Adult Swim added older content to the YouTube Network. At present the majority of YouTube content is user generated or uploaded. The addition of paid content will see a dramatic change to the existing site, offering new sources of revenue and advertising opportunities.

“Google’s trying to find ways to better monetize this very good asset,” said Andy Miedler, an analyst at Edward Jones & Co. “As long as the economics make sense, I certainly applaud them for trying to increase the revenue stream.”

Chris Dale, a YouTube spokesman, declined to comment on “rumors or speculation.”

“We hope to expand on both our great relationships with movie studios and on the selection and types of videos we offer our community,” Dale said, without being more specific. The Wall Street Journal reported the story yesterday.

YouTube has also reported that it has come to a final settlement with PRS for Music and Music Videos will shortly be available to view in the UK once again. PRS requested a large royalty fee from YouTube for playing and distributing Music Videos and related content. YouTube announced that the Fee structure was too high and that advertising revenue would not fund such high charges.
After lengthy discussions with PRS, YouTube announced back in March that it would be blocking music content until a settlement could be made in regards to license fees. Nearly 6 months on and the service will finally be renewed.

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PRS, The Performing Rights Society for Music has long been in the eye of controversy in the UK. There squeaky clean image has been tarnished with allegations of perusing licensing fees from small businesses who’s 2-3 staff are listening to the radio in non public areas. It’s understandable that with the down turn in CD sales and the issues music piracy, PRS need to enforce the collection of licensing fees to reimburse to the performers and support new music. Youtube is the latest casualty with PRS proposing an increase in the cost of fees after the expiry of YouTube’s current contract. The costs are so high that YouTube would be paying more than the revenue achieved on the site through advertising. Youtube wanted to justify the costs and track exactly which videos were played using their video ID system. It has also been noted that PRS would not identify which artists and songs are covered by the licence which has obstructed this proposal.
“We value the creativity of musicians and song writers and have worked hard with rights-holders to generate significant online revenue for them and to respect copyright,” said parent company Google.
“But PRS is now asking us to pay many, many times more for our license than before. The costs are simply prohibitive for us – under PRS’s proposed terms we would lose significant amounts of money with every playback.”
Google is still negotiating with PRS but until an agreement is made videos from artists on EMI, Warner, Universal and Sony BMG will disappear from the UK version of YouTube.
Patrick Walker, director of video partnerships on YouTube said that music videos are some of the most popular and important content on YouTube.
“This is about long-term viability,” he said. “If the next Arctic Monkeys is going to surface we need to get this to work. It’s in the interest of the music industry – we’re not just doing this for us. The record industry needs a new business models so it’s kind of a shame that this has happened. But sometimes you have to step back to step forwards.”
PRS have claimed that YouTubes announcement came without warning and with no consultation.
“We were shocked and disappointed to receive a call late this afternoon informing us of Google’s drastic action,” said PRS chief executive Steve Porter. “… which we believe only punishes British consumers and the songwriters whose interests we protect and represent.”
In an attempt to combat the fury and anger of YouTube users PRS emphasised that it did not ask YouTube to remove the videos and “urges them to reconsider their decision as a matter of urgency”.