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YouTube (news, site) plans to spend big bucks in an attempt to raise its service from pushing video clips to full-length movies.

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YouTube already has a streaming system for delivering video content around the world, but its revenue is largely advertising-dependent. Perhaps jealous at seeing Netflix take control in the movie marketplace, and wary of Amazon entering the scene with its own service, the company is now planning its own film streaming project.

To avoid opening up in the congested US market, the company is planning a European rollout where users have been begging for a blockbuster Netflix-like service for some time, having had to make do with low-definition rental services such as Blinkbox, niche cinema from Mubi or the occasional hit on the BBC's iPlayer for UK viewers.

A Big Budget Production

Google has apparently set aside around US$ 100 million, according to a New York Post article, which will see it through the minefield of contract negotiations, high fees and setup costs that such a project will require. Presumably subscription-based, when launched it should help Google generate even more revenue from YouTube.

The job to produce results will be a race against time as many HDTV sets are increasingly shipping with IPTV options and services, while Apple TV, Roku and other hardware solutions are maturing. All of this is giving home users a myriad of options to enjoy the latest movies on screens big and small.

Google picked up a DRM specialist company in Widevine last year that could be used to improve and handle security for Hollywood pictures to prevent piracy. But, given YouTube's troubled past with copyrighted material, it may take some persuading to get the big studios on board.

Strike Up the Bandwidth

A final consideration will be bandwidth issues and net neutrality. If the service does turn out to be a roaring success, ISPs will blow a fuse at the amount of bandwidth being sucked up by the HD-watching masses.

So, Google and YouTube have the technology, power and money to create something, but will it produce an Oscar-class ending? Will users be happy subscribing to a service that used to give them five minutes of fun a day? It will be exciting watching the progress of the project to find out.