If Google gets its way, you may soon be watching recently released DVDs on YouTube … but it would be for a fee.

YouTube, the undisputed king of online video, is supposedly in talks with major Hollywood studios like Lions Gate Entertainment Corp., Sony Corp., Metro-Goldwyn-Mayer Inc. and Warner Bros. about streaming recently released DVDs on the Google owned site.

According to The Wall Street Journal (registration required), the talks with the studios are pretty far along, and, if finalized, you could see movies show up on YouTube the same day as they would appear on DVD and Blu-ray.  While YouTube is best known for being the home of free videos, the majority of the movies would be offered on a rental basis, but a small percentage of them could be shown with advertisement support to pay the royalties for the showing.  While Hulu, which is quickly climbing the video site rankings, has been showing full-length movies for some time now, they are not current releases.

Hollywood has seen DVD sale revenues going in to steep decline over the past few years, so the studios are desperate to find new revenue streams to make up for those lost sales.  While I’m not sure YouTube would be my first choice for a way to view a movie, it would certainly be better for most than having to have a monthly subscription to Netflix or going out and just purchasing a copy of the movie.

Currently it is expected that 10,000 Google employees will run the new service through its paces for a period of three months prior to it being released to the public.  The test had originally be scheduled for the beginning of September, but that date has now been pushed back due to the length of time the negotiations with the studios has taken.