Why YouTube's dismal returns from Sundance movie rentals aren't a complete failure

Right before the Sundance Film Festival got into full swing a few weeks ago, YouTube announced that they would finally jump into the video rental fray by offering five Sundance films for rent. The films were available from January 22 to January 31 for $3.99 each. Today the NYT Bits Blog is reporting that the rental experiment wasn’t very successful for Youtube. In the 10 days they were available the videos netted 2,684 views and earned a total of $10,709.16.

Admittedly, the numbers aren’t great, but it seems that Youtube wasn’t really pushing to gain many viewers in the first place. They didn’t promote the rentals to YouTube users very aggressively (there wasn’t even a special rental page that listed all of the films), and it seems like they relied on mostly film blogs to make consumers aware of their “beta” rental experiment. Considering that independent films and documentaries don’t attract large audiences in the first place and that it’s much more difficult to get a YouTube video onto a television than a Netflix streaming title, it’s not hard to see why they didn’t rake in the big bucks.

YouTube spokesman Chris Dale told Bits that the rental experiment still exceeded their expectations. Despite the low viewership, they were still able to expose those films to hundreds of viewers that wouldn’t have had a way to see them otherwise. YouTube has partners lined up to bring more rental content to the site over the coming months, and perhaps then we’ll see the full potential for paid content.

Google, which owns Youtube, previously offered video rentals and purchases on Google Video. They famously killed access to commercial content back in August 2007, leaving users who purchased or rented content in the dust. That move led to widespread DRM criticism across the web. It’s also probably serves as an instructive lesson for YouTube executives.

Like many new Google features, offering Sundance rentals was a beta test for YouTube. It allowed them to make sure that Google Checkout was integrated well into the site before they started offering more popular content. They also needed to figure out a way to make the videos easily accessible to users in the living room.

There are a few ways to get YouTube on your TV right now — including built-in access in some high-end TVs, as well as software offerings like Playon and Tversity that utilize game consoles  — but it’s hard to find specific content. I’ve taken to “Favoriting” specific YouTube videos that I’d like to watch on TV, but YouTube will definitely need to add some sort of “Purchased content” category to streamline that whole process.

Ultimately, my point is that we shouldn’t write off the viability of YouTube movie rentals from these Sundance numbers alone. There were many factors working against their success, and it’s simply way too early to judge rentals based on these films alone. With more rental content coming to Youtube over the next few months, as well as devices like the Boxee Box that will easily allow consumers to stream web video in their living room, we’ll likely have a better idea how successful rentals will be for the site by the summer.

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  1. [...] indeed any) angle, the numbers aren’t great; nevertheless it might be worth casting your eye over this piece from Venturebeat, which suggest that YouTube rental might just prove itself [...]

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  3. [...] has been doing for the past two years. Back in 2010, Sundance and YouTube also experimented with offering full films from the festival for rent — with disappointing [...]

  4. [...] has been doing for the past two years. Back in 2010, Sundance and YouTube also experimented with offering full films from the festival for rent — with disappointing [...]