Google is working on a deal with major Hollywood studios that will allow it to distribute pay-per-view video through YouTube.
If negotiations succeed, YouTube could begin showing top-tier streaming content on demand before the end of the year, according to a report in The Financial Times.
Google did not immediately respond to a request for comment.
The consumation of such a deal would add significant value to Google TV, the company's effort to integrate the Web and television on the Android-based Google TV platform. The first Google TV device, a Sony TV, is scheduled to ship this fall.
Google CEO Eric Schmidt and the CEOs of six other major media and technology companies appeared on stage together at the Google IO developer conference in May to introduce Google TV and to signal the seriousness with which these companies are pushing the convergence of TV and the Internet.
While YouTube continues to be dominated by user-generated content, the site has been steadily moving to support major studio content and a traditional TV viewing paradigm. Last June, for example, YouTube introduced YouTube XL, a revised interface designed to make it more enjoyable to view Web video on the large screen TVs typically found in the living rooms of the affluent.
Other companies are pursuing a similar strategy. Apple is reportedly planning to revise its Apple TV device by moving it to the iOS platform. In addition to allowing users to download iOS apps in a living room setting, the company is expected make $0.99 rentals of TV shows available.
Both Google and Apple are moving to compete more directly with other streaming content services, such as Amazon Video On Demand, Hulu, and Netflix.