Waterborne, Ben Rekhi's directorial debut about "the fictional aftermath of a bio-terrorist attack on the water supply of LA," was very popular at last year's SXSW Film Festival, where it was the runner-up for the Narrative Feature audience award. Though the film's producers were offered $125,000 in exchange for distribution rights, they turned the unnamed suitor down in order to become the first feature made available under the Google Video Store's "new 'download-to-own,' distribution model."

The film, which made its online debut yesterday, will be available to view free in a streaming format for a week; in addition, it's available for download at the price of $4.99. According to Google, what sets their approach apart from those of other downloadable video sources, is that once a customer pays for a download, their use of the file is completely unrestricted - it can be moved to an iPod, or burned to DVD forty-seven times. Whatever the customer wants to do is fine, because they own the file. In addition, Google is reportedly splitting profits with the creators of content in an unusually friendly way: 30% for Google, 70% for the creators. This, if nothing else, should earn them looks from filmmakers who are searching for cheap ways to reach new audiences.

What do you think - are the guys at Google stretching themselves a little bit too thin with this new venture, or is it yet another great new step for an equally great company? Also, is the profit structure really as good as it sounds? Input would be appreciated, particularly from frequent users of Google Video (personally, the reliance on Flash is such a pain for me that I rarely use it).