Technology, Movie Rental | featured news

YouTube and Paramount Pictures have reached a deal to make nearly 500 films available to rent online, even while their parent companies continue to feud over a $1 billion lawsuit.

Phone company Verizon Communications Inc. will challenge Netflix and start a video streaming service this year with Redbox and its DVD rental kiosks.

Netflix’s stock rose by about 10% last week before falling lower, driven by rumors about potential acquisition by Verizon. While reports indicated that Verizon may be seriously considering the acquisition at around $4.6 billion, the company denied that it has organized any talks or meetings with Netflix. We think that Netflix will not sell itself at the implied price per share that results from $4.6 billion bid. For details see Verizon Would Have a Tough Time Acquiring Netflix which talks about why an acquisition at stated value is unlikely, be it by Verizon or another potential suitor Amazon. In general, several analysts including Trefis analysts see any acquisition as highly unlikely.

Netflix is abandoning its widely panned decision to separate its DVD-by-mail and Internet streaming services because it would make them more difficult to use.

Netflix cannot afford to reduce the number of titles it acquires due to the competitive environment.

YouTube's movie rental service is still in its infancy, and it still only offers a small selection of films, but that could change quickly. YouTube exec Hunter Walk told MediaPost that the site will soon offer its users the ability to charge rental fees for their uploaded videos.