Warner's Facebook Movie Rental Idea Hardly a Threat to Netflix

By Michelle Amodio March 11, 2011

Warner Bros.’ plan to offer $3 buck film rentals via the popular social networking site, Facebook is no threat to Netflix, so says the chief himself.

Well, the chief content officer, Ted Sarandos, was recently quoted as saying “Nobody goes to Facebook to watch movies.”

Sarandos may be right. Facebook is often a place where people go to gripe about the minutiae of their day and play games such as the popular FarmVille and Bejeweled Blitz. However, giving just one more reason to keep users there might make the site a more appealing one-stop place for entertainment needs.

Why the confidence?

According to Bloomberg, this is all a reaction to Netflix’s dip by 5.8 percent the same day that Time Warner Inc. announced its plan to offer the $3 rentals, starting with the popular comic-based movie “The Dark Knight.” The newly launched idea sent Netflix down below $200, which is apparently a first since the beginning of the year.

Perhaps this is just how business goes, where one better replaces the other. Netflix has long been hailed as the future of video rental, as former rival Blockbuster went down in flames earlier this year due to the collapse of the brick-and-mortar video rental industry. With Apple and Amazon creeping up on Netflix as competition with digital distribution channels, Netflix now has one more worry with the Warner Bros. deal. This could be the one that makes Netflix disappear altogether.

However, Noteable Calls recently reported on speculations that Netflix was doing its own chumming around with Facebook.

“Facebook integration could boost global subscriber growth. We believe Netflix is working with Facebook to tightly integrate Netflix into Facebook’s platform. This could help increase time spent in Facebook and drive incremental Netflix subscribers domestically and in new international markets,” said Andy Hargreaves, analyst at Pacific Crest Securities, in a call about his prediction.

Netflix made headlines recently when the company inked a deal with CBS. In a two-year, non-exclusive agreement, Netflix subscribers will be able to watch shows from CBS’s lineup including “Medium,” “Frasier” and “Cheers,” as well as “Star Trek” and “Twin Peaks.” The deal does not include many of CBS’s current television shows due the network being “wary of potentially hurting the rerun value of the shows on its schedule,” as reported by the LA Times. Only two recent programs -- "Medium" and "Flashpoint" were cited as part of the deal.

Michelle Amodio is a TechZone360 contributor. She has helped promote companies and groups in all industries, from technology to banking to professional roller derby. She holds a bachelor's degree in Writing from Endicott College and currently works in marketing, journalism, and public relations as a freelancer.

Edited by Tammy Wolf

TechZone360 Contributor

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