Google Inc.'s (NASDAQ: GOOG) YouTube may one day not be a collection of dancing cat videos and dismal-quality cellphone movies. Although the content on YouTube ranges the gamut of quality and sources, how about rental of a quality movie there just using a quality online movie rental source like CinemaNow or Netflix Inc. (NASDAQ: NFLX)? That day may be coming.
The word is that Google executives are talking to movie studios to see if YouTube could indeed become an online movie rental medium. It's about time. After years of offering mostly amateur video for free -- and becoming the largest online video source on the planet -- Google has to be taking a hard look at how to push monetization on the site. Sure, it's put advertising in place in a way that doesn't scare of the audience, but more has to be done. Google did not buy YouTube to be nice -- they purchased the company to eventually make money.
Adding a fresh and new collection of films on a regular basis will attract more advertisers to YouTube. Adding those partners will bring in further revenue streams to Google, a fact GOOG investors should be cheering. Although nothing at Google has been as lucrative as selling text ads next to search results (and that brings in almost all of Google's revenue), the company has struggled to find other areas of its business to monetize.
Perhaps this could be one of the few that actually makes sense and works. And, with movie studios finally having to admit that they need to live online or shrivel and die, those companies need outlets for their material.
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