YouTube recently announced its new partnership with the Sundance Film Festival to make five films available for online renting through the end of January. The idea for Google's YouTube movie rentals is an attempt to compete with rivals such as Netflix, iTunes and Xbox Live.

The five rentable movies so far are "The Cove," "Bass Ackwards," "One Too Many Mornings," "Homewrecker" and "Children of Invention." All of these movies are top audience favorites and world premieres. Despite YouTube's growing popularity for homemade videos, Ralph R. Frasca, professor of economics in the School of Business is skeptical of its movie rental success.

"I don't know whether this will work," he said. "However, the consumer should benefit from the increased competition. The Internet, by lowering distribution costs and enhancing choice, has been a tremendous benefit to consumers. Companies like YouTube that provide free services can only succeed if they can tie in those free services to a fee for service good. This appears to an optimal tie-in."

Although YouTube's collection of homemade videos are free, their online movie rentals will cost $3.99 for 48-hour viewing. This is a longer viewing period than pay-per-view movies which have 24-hour viewing from cable providers. YouTube prices may be a leading deterrent for college age students.

"If I want to watch a movie, I'll rent it from the store or borrow it from the library or a friend," said Charity Smalls, second year graduate student. "It's more cost effective. I don't utilize other online movie subscription services so I have no plans to use YouTube's. However, I do plan to continue to use the site."

YouTube is ranked sixth for online traffic along with other Web sites such as Google and Yahoo, but it has fallen behind its key rivals Netflix, Apple and iTunes, according to www.newsoxy.com. The free content and videos are not in full support by investors and shareholders because the incorporation of rental business on YouTube is considered to be pressure from Google investors to make profits outside of solely relying on ad revenue from its video Web site.

Although it is currently renting out only five movies, YouTube hopes to work with partners in the mainstream Hollywood motion picture business to provide online movie rental of box office hits. This rental service is only for consumers living in the U.S.