Google pours fuel on the UBB fire with movie rentals

Just when all was quiet on the usage-based Internet billing front, here comes Google to stir the pot again. The company on Wednesday launched YouTube movie rentals in Canada, which should make a nation of already prodigious online video consumers even more ravenous devourers of bandwidth.

Google launched YouTube movie rentals in the United States on a limited basis in January 2010, then got serious about it a few months ago by adding thousands of titles. The Canadian launch is its first international expansion, according to Google Canada spokesman Aaron Brindle.

As with all similar services available in Canada, this one comes with a bunch of caveats. The selection will be fairly limited, with just over a thousand movies from the catalogs of Warner Bros. and Universal, and Canadian studios E1, Mongrel and Alliance Atlantis. The films are also only offered in standard definition, as per the studios’ wishes, and will carry a $1 premium compared to what they cost in the U.S.: $4.99 for new releases and $3.99 for older titles.

Bindle said Google is following industry standard on costs, where studios set the wholesale price and have some say in the ultimate retail price. The bonus for Canadians, though, is that they get their rentals for 48 hours as opposed to the 24 hours Americans get.

Despite all that, it’s reasonable to expect YouTube movies will still enjoy some success in Canada, simply because Canadians are apparently among the biggest users of the site in the world. Google’s offering therefore has tremendous ease of access to customers who are already happily using other parts of the service. That’s brand recognition and a point of sale that other competing services, whether it’s Xbox Live, PlayStation Network, Rogers On Demand Online, Shaw Movie Club and even Netflix, don’t necessarily have.

If that’s so, it’s also reasonable to expect more noise on the usage-based billing and net neutrality fronts. If Canadians are already chugging huge amounts of data, as the likes of Cisco has found, then movie rentals on the most popular online service in the country is only going to add fuel to the fire.

Satellite, cable and IPTV companies, who are also Internet providers, are especially not going to like this one bit, since Google is now in direct competition with their on-demand businesses. They’ve already fought back against competing services with throttling, usage caps and political lobbying. Will they take the entry of such a powerhouse company into one of their biggest cash cows lying down? Not bloody likely.