Warner Bros. said Tuesday it will begin to test selling and renting movies through its Facebook movie pages. Consumers will be able to use Facebook credits, virtual currency, to buy or rent movies. The cost per rental is 30 Facebook credits, or $3.
“Facebook has become a daily destination for hundreds of millions of people,” said 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.”
The announcement apparently spooked some investors in Netflix. While the broader market was up, Netflix shares fell nearly 5% in early trading Tuesday to $198.26.
The first film being made available is the Batman blockbuster “The Dark Knight,” which can be rented starting today. Consumers will be able to watch the movie from their Facebook account for 48 hours are the initial transaction.
On Monday at a Deustche Bank media conference in Florida, Time Warner CEO Jeff Bewkes said he would like to see more “vibrant competition” in the video subscription market dominated by Netflix.
“This is a great way for Warner to test a couple of things simultaneously,” said analyst James McQuivey with Forrester Research. “First, they are taking the content to where the people are. The Dark Knight has nearly four million Facebook fans. Why should those fans have to look up the movie on some system or in a VOD library to watch it? From that perspective, this is a great leap forward for consumers.”
“But this is also a chance for Warner to test a direct relationship with viewers that doesn’t involve Comcast, Netflix, or even Wal-Mart,” McQuivey added. “If Warner can build a direct relationship to those customers through a channel they frequent more often than they visit local retailers or cable VOD menus, this could be a lucrative marketing platform for them. Plus, they can use the uniqueness of this event to test a different price point. Thirty Facebook credits is $3 for a 48-hour viewing window. That’s better than a lot of VOD systems which charge $3.99 for a 24-hour window. So with this move, Warner can test so many things that will help it define its approach to the market.”
Does it have a larger impact beyond Warner Bros? “Yes, other studios will want to follow suit,” McQuivey said. “As Facebook pushes itself into more devices like mobile phones and tablets, it will presumably take with it the ability to deliver these experiences, giving these producers access to a variety of platforms that would be expensive to approach on their own.”