Facebook + Warner Bros: A Blow to Netflix?

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Photo: www.legendfc.com

Although Netflix has stated they aren’t threatened by the announcement earlier this week that Warner Bros. Entertainment would begin offering streaming movies on Facebook, we have to wonder. After all, by far the most prevalent options for streaming full length feature films online have been Netflix, iTunes, or Amazon for quite some time, with Netflix leading the pack by a wide margin.Ted Sorandos, the Chief Content Officer for Netflix, said the reason why Netflix has nothing to worry about is that, “People don’t go to Facebook to watch movies.” Well, they didn’t go to Facebook to watch movies, but that was before you could watch real movies on Facebook. When all of Facebook’s 600 million members (half of which log on daily) are given another good reason to stay put on the social networking site and not wander off to another streaming movie choice, it’s hard to believe Netflix and the other competitors in this space won’t feel it.

It will be a while before all or even most Facebook members can take advantage of this new service though. Warner has plans to add countries, but for now, only U.S. IPs can access the streaming films, and not even all states. Warner Bros. hasn’t used this terminology that we know of, but the program is in a sort of beta test right now, and they plan to evaluate as they go and eventually ramp up to a full offering of films in many countries.

What did WB lead with to kick off their new service? The Dark Knight, a movie that has already grossed over a billion dollars globally. And you can’t see it on Netflix. The upside for Netflix could be that to watch The Dark Knight on Facebook, you have to dole out 30 “Facebook Credits,” about $3.00 worth. With Netflix charging around 10 bucks for unlimited streaming movies, it’s a better deal, but, again, you can’t watch WB movies on Netflix, so in some ways we’re not really comparing apples to apples.

Warner Bros Dark Knight

Investors apparently didn’t share the optimism Netflix is hyping either, as their stock price fell 6% on Tuesday, the day of the Warner Bros. announcement. It has since rebounded pretty well, but it’s clearly got people thinking.

This arrangement is great news for Facebook either way. They reportedly get 30% of the take on the deal, which could add a significant income stream to their already-hefty revenue numbers. It makes us wonder what’s in the future for Facebook and other social media properties. With Google producing mobile phone operating systems and cars that drive themselves, and Facebook renting movies, it will be interesting to watch the next few years unfold.

What do you think of this move by Warner Bros.? Share your opinion in the comments below.

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