Netflix is fast becoming the king of digital movies, and is one of Hollywood's biggest frenemies. But even though Netflix would appear to be sitting pretty, it may have some stiff competition soon.
The source: Facebook.
This week, Warner Bros. announced that it will be offering streaming movies through the fan pages the studio operates on Facebook. In the near future, Facebook users will be able to download movies.
Warner Bros. is starting its Facebook effort with The Dark Knight, one of its biggest blockbuster hits. The Facebook fan page for Dark Knight is a popular one and has nearly 4m fans. Those fans will be able to watch the movie from within Facebook by clicking on a "Watch" tab and paying 30 Facebook Credits ($3).
According to Thomas Gewecke, President of Warner Bros. Digital Distribution, "Making our films available through Facebook is a natural extension of our digital distribution efforts. It gives consumers a simple, convenient way to access and enjoy our films through the world’s largest social network."
This, of course, mirrors the thinking of many retailers, many of whom look at Facebook's massive audience and see dollar signs. To that end, some are making serious investments in f-commerce hoping that Facebook can be turned into a potent platform for commerce, not just marketing outreach.
The same sort of thinking has some excited about the marriage of movie distribution and Facebook.
One analyst at Goldman Sachs (whose obvious bias should be noted) thinks Facebook "could some day become a credible threat to Netflix." But that sort of talk seems more hype than substance at this point, as it's unclear whether the site's massive audience will translate to rental sales. Sure, Warner Bros. has 4m potential customers on its Dark Knight fan page, but how many will really want to watch the movie from this page?
The advantage that companies that have their own websites have is that they control the user experience. As with everything on Facebook (such as Facebook Comments), companies aren't free to do what they'd like, which even if it doesn't prove to be a total conversion and satisfaction killer, means that many companies may find Facebook a tricky distribution and commerce platform to master.
This said, expect more and more businesses to start hawking their wares within Facebook regardless of the challenges. Angry Birds, for instance, whose App Store success has been widely publicized, is going to be releasing its apps on Facebook
Such moves make sense: Facebook Credits theoretically reduce barriers to success on the payment side of the equation, and in a multi-channel, multi-platform world where consumers want to be able to consume and purchase on their own terms, Facebook is certainly one of the most obvious platforms for companies to experiment with.
But that doesn't mean that Facebook is going to kill off other platforms or distribution partners. Once again, the companies that are doing it right will be looking at new channels and platforms as pie-growers, not pie-changers.