On Tuesday, Warner Bros. announced it would make movies available to rent or purchase through Facebook. It's as simple as clicking the "rent" icon on a movie's official Facebook page. The first feature on offer is 2008's The Dark Knight. Renting a movie costs $3 (or 30 "Facebook credits"), and viewers are given two days to watch it. In reaction to the news, Netflix's stock dropped more than 5 percent on Tuesday morning. And that's after the stock had already fallen in previous weeks on worries that Amazon, another video-streaming competitor, would eat into its profits. Will Facebook's entry into the crowded home-entertainment field be a death blow for Netflix?
Netflix shouldn't worry yet: "Facebook’s initiative could be a great success," says Anthony John Agnello at Investor Place. But Netflix shouldn't be sweating just yet. That's because flat-fee subscription services — the model Netflix follows — still "hold the most cachet with audiences right now." Facebook will attract some users who prefer its digital currency, but "that’s not enough to start getting people to drop their Netflix subscriptions."
"Facebook not ready to wear Netflix's crown"
Netflix could be toast: "If Netflix doesn’t watch its back," says Jon Friedman at MarketWatch, "Facebook could do to it what Netflix did to Blockbuster Inc.: make it irrelevant in the digital age." The movie business is just the "logical next step" for a company that has become more and more a part of everyday life. Netflix boasts a "smart, aggressive management team," but it "would be wise to look over its shoulder at the oncoming train called Facebook."
"Facebook tells Netflix: Watch your back"
What took Facebook so long? "There's no reason this shouldn't work," says Peter Kafka at All Things D. One big reason is that Facebook already has a social-media advantage over its peers. So while other sites try to integrate social-media "hooks" into their user experience, "Facebook doesn’t have that problem. It is the social hook." It's a wonder Facebook didn't get into the movie business sooner, but just imagine the possibilities "if Mark Zuckerberg and the big studios decide they’re really serious about making this thing work."
"Facebook begins movie rentals with Warner Bros."
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