“YouTube will imminently launch a movie-on-demand service charging users to stream mainstream Hollywood movies off the world’s largest video sharing site,” Sharon Waxman reports for The Wrap. “The new service means a full-bore challenge to Apple’s iTunes service – currently the most powerful player in paid video streaming — and a welcome new revenue stream for Hollywood as home entertainment revenues continue their steep decline. The service may start as early as this week or next, and is expected to be announced soon by YouTube.”

In an update, Waxman reports, “YouTube, which had earlier declined to comment for the story, issued a statement after this story was published, pointing out that it has rented movies for a year, while declining to comment on the broader initiative it is about to launch with the major studios on board. ‘We’ve steadily been adding more and more titles since launching movies for rent on YouTube over a year ago, and now have thousands of titles available,’ a spokesperson said. ‘Outside of that, we don’t comment on rumor or speculation.'”

“But in fact the video giant has never rented mainstream movies on this scale during the traditional DVD window,” Waxman reports. “The service is the biggest studio VOD deal since all the major studios signed on to Apple’s iTunes rental service in January 2008… It was not clear what YouTube would charge.”

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MacDailyNews Note: Google’s YouTube is currently included as an app within Apple’s iOS devices which include iPhone, iPod touch, iPad, and Apple TV.