Google's YouTube rumored to ink movie rental deal

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Since Google ( GOOG ) acquired YouTube in October 2006 , the company has witnessed steady growth in its advertising revenue as it utilized its parent company's resources. Now, the movie sharing site is rumored to be close to reaching a deal with some major Hollywood studios that would make new release movies available for rental through its website. 

Citing studio executives from Sony Pictures Entertainment and Warner Brothers, the New York Times reports that the two companies have finalized a deal with YouTube that would allow users to rent their movies through the web's second most popular site . According to the sources, the rental fees will compare to the $4 to $5 that iTunes charges.

Nonetheless, YouTube must still court other studios if it hopes to compete in the sphere. To do that, however, it faces considerable challenges. Walt Disney Studios ( DIS ) has close ties to direct competitor Apple ( AAPL ), while Paramount Pictures corporate owner Viacom (VIA.B) is currently engaged in a litigious battle with YouTube over copyright infringement. It's best bet may lay in 20th Century Fox. In total, the three movie studios control nearly two-thirds of the North American movie market.

YouTube refused to comment on the rumors, but analysts assert if the company is aggressively targeting the movie rental market as a means to keep up with rivals like Netflix ( NFLX ).

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: News Headlines , Business , Technology , US Markets
Referenced Symbols: AAPL , DIS , GOOG , NFLX

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