YouTube rentals: The new Netflix?

YouTube rentals: The new Netflix? (iStock and YouTube)If you were looking to get rich off that adorable video of your baby dancing to Rihanna’s “Rude Boy,” today might be your lucky day.  This week, YouTube quietly rolled out a YouTube Rentals beta program open to any user looking to monetize their content.  All you do is upload your video, choose a few settings, wait for YouTube staff approval, and then sit back and watch the money roll in.

Or not.  Conventional wisdom dictates that consumers aren’t likely to pay for something they’re used to getting for free.   In fact, they can get down right annoyed and angry about.  On the other hand, try telling that to “The Simpsons” and “Sex and The City” who made a killing at the theatrical box office on content people were used to getting pro bono. 
YouTube deserves kudos for the ease and freedom with which users can upload and set up rentals.  Simple scroll down menus allow you to decide how much to charge (from $0.99 to $19.99) as well as rental duration (from 24 hours to unlimited viewing).  You can also set up trailers for your content within the main set-up console, and consumers can pay easily via Google Checkout.

YouTube launched a limited version of the Beta in January with a handful of indie films, and after earning a modest $10,709.16 in ten days declared the trial a success.  While independent filmmakers and educational video makers will likely be the first to jump on the new opportunity, major film and television companies should follow suit since they have millions of people watching clips of their content on YouTube.

Though the program is in its infancy, given Google’s power in the online marketplace, Netflix, iTunes, and Amazon are likely looking on with a tinge of trepidation.  And while iTunes music is fairly open to independent artists, YouTube is really opening a new long tail marketplace for indie video content makers that iTunes doesn’t tap with it’s film and TV offerings.

The one huge risk YouTube is taking, which puts its entire success in jeopardy, is that users may feel alienated by a tone of commerce they’re not used on the site. Or more to the point, people may not want YouTube to be Netflix.  In all likelihood, the site’s users will only feel upset if they can no longer watch the same content they used to watch for free.  If YouTube can carefully ensure the program only expands the site to include new offerings then it could be sitting on a new cash cow that also adds to the user experience.