Pay-per-view movies coming to YouTube?

YouTube is said to be negotiating with major Hollywood studios to offer streamed, pay-per-view movies by the end of the year.

The move would pitch it directly against Apple and Netflix, which are both working on beefing up their entertainment offerings.

According to the Financial Times, negotiations have been going on for month but have hotted up recently, perhaps in response to Apple’s plans.

In April, the company started trialling a movie service on a limited basis, offering around 400 classic and indie films. But it’s believed to have been beta-testing a movie rental service since January. Prices would be around the $5 mark, with movies available at the same time as they appear on DVD.

The service would presumably be delivered through Google TV, the company’s effort to combine cable TV, streamed media and search into one product.

“Google and YouTube are a global phenomenon with a hell of a lot of eyeballs – more than any cable or satellite service,” a source told the FT. “They’ve talked about how many people they could steer to this… it’s a huge number.”

Apple is expected shortly to announce improvements to its TV service, and is reported to be planning to add TV rentals to its existing service. Meanwhile, Netflix recently signed a $1 million deal allowing it to stream movies from Paramount, Lionsgate and MGM.