Prior to YouTube's Monday announcement that it would be significantly expanding its service to rent feature films, Google had been asking its content providers to sign amended contracts allowing the company to activate YouTube rental apps that will work on television monitors, smart phones and other mobile devices.
"They were very insistent that we sign an amendment to our contract right away," said Linda Nelson, co-founder of Nelson Madison Films and the Indie Rights distribution service, which currently has about 20 films available for rental on YouTube.
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"Until now, YouTube hadn't been really turned on," she told TheWrap, "because you could only watch the films on your computer, unless you're tech-savvy."
Nelson also provided some details about what Google has offered providers to rent films via YouTube. (Current partners include NBC Universal, Sony Pictures, Warner Bros., Lionsgate, the Weinstein Company and Magnolia Pictures.)
One advantage of the initiative, she said, is that the company is flexible with content providers.
"One of the beauties of their system is that they're giving the content owner the ability to change the price on the fly," she said. "If I want to change the price on my horror films to 99 cents on Friday nights, I can do it immediately.
"On iTunes, it might take three months to change the price, and they don't like different price points. But YouTube lets you set it at whatever point you want, for however long you want.
YouTube, she said, allows its providers to set a price anywhere from 99 cents to $29.95, and takes "a very reasonable piece" of whatever price is set. (While a confidentiality clause in the Google contract prevents providers from disclosing the split, the comparable iTunes platform divides proceeds 50/50 with its providers.)
Google also permits providers to stream full movies for free, with ads attached; the Lionsgate Movies Channel on YouTube currently uses this option.
Nelson Madison Films has about 20 films available on YouTube, most priced at $1.99. A special YouTube channel showcases the company's work, which is separated into genres and which ranges from new, low-budget features to the 1980s cult horror film "Madman," which their channel makes available in HD for the first time ever.
Streaming services, added Nelson, have allowed small films to make steady money in ways that simply weren’t possible under old models.
"We've got little films making five grand a month on PlayStation," she said of the Sony game console that also connects to the internet and allows rentals.
"This is a way for indie filmmakers to make some money. They never used to make any money with traditional distribution."
While renting via YouTube has not provided Nelson Madison with much revenue so far, she said, she expects the YouTube initiative to become a major player as it becomes fully operational.
"The important thing is that you can use a search engine to find a movie," she said. "If you want to find a movie with squirrels in it, you can. You can't do that on Netflix unless you know the name of the movie or the director, and you can't do it on cable VOD because it's usually alphabetical.
"But YouTube and Google are very searchable, and they let us put as many tags as we want on each film."
And YouTube's Monday announcement may even put an end to a conversation that Nelson said she's has with lots of skeptics.
"When I talk to people and say, 'We rent movies on YouTube,' they always say, 'You can't rent movies on YouTube,'" she said with a laugh.
"Well, yes you can."