YouTube took another step toward competing with Netflix, Apple and Blockbuster by completing a deal with Paramount that will allow YouTube users to rent movies such as "Hugo," "The Godfather," and "The Adventures of Tintin."
The deal, set to be announced Wednesday, covers nearly 500 titles in Paramount's movie catalog, which includes "Ferris Bueller's Day Off" and "Transformers."
YouTube did not specify the full scope of the deal but said that it includes some new releases and some catalog films, depending in part on Paramount's distribution agreements. It does not include "Titanic" or the later films in the "Transformers" franchise, for example. The films will be available on a pay-per-view basis for $2.99 for catalog films and $3.99 for new releases.
The deal is YouTube's fifth with a major studio, but this one includes one glaring irony: Paramount's parent company, Viacom, sued YouTube for $1 billion for copyright violations several years ago. That case is on appeal.
YouTube is slowly fashioning itself as a destination for TV and movie rentals, and has deals with major studios like Sony Pictures, Universal, The Walt Disney Co., Warner Brothers and, now, Paramount. YouTube also has agreements with indie studios such as Lionsgate.
Though these movies won't be ad-supported, YouTube is cashing plenty of checks from the studios, which covet the YouTube homepage as a key platform for promoting films.
The deal heats up competition for the home movie rental dollar, with Netflix, Amazon, Apple, Walmart and others vying with cable and satellite companies -- one reason many are looking to original programming to differentiate their offerings.