March 9, 2011

Watch Warner Bros Movies On Facebook

Facebook is getting a host of movies for its site from Warner Bros, opening up a new source of revenue for the social networking giant and setting up new competition scenarios for online entertainment companies.

Consumers can rent and buy movies using Facebook Credits, a virtual currency used mainly for games on the site until now, according to Warner Bros on Tuesday.

Facebook said it will take 30 percent of the revenue from sales by third parties on the website using Credits. The service will be available in the United States initially, the company said.

The online streaming of films on Facebook brings the half-billion-member strong social network to a new plateau, which has grown into one of the biggest and most powerful Web players by making it easy for users to share photos, videos and other content with their friends.

Goldman Sachs analyst Ingrid Chung said in a note to investors that Facebook represents a real threat to online rental service Netflix Inc that caught Wall Street investors off guard. The "wisdom of friends" could be a much bigger drive for movie viewership than the "wisdom of crowds," Chung wrote.

However, Lazard Capital Markets analyst Barton Crockett said in a note to investors that pay-per-view services have not been as popular as subscription-based movie services, and noted that Warner Bros' offering is a "far cry" from Facebook launching a subscription service.

It is not yet known if other movie studios are planning similar programs with the social network.

The first movie available on the Warner Bros Entertainment page on Facebook is "The Dark Knight." More titles will be available for either rent or for purchase in the coming months.

Rentals cost 30 Credits, or $3, for 48 hours of viewing time, and viewers can pause and restart a movie whenever they log in.

A person familiar with the Warner Bros/Facebook project told Reuters that the deal was not a partnership, but rather, an application that Warner Bros developed on its own, using Facebook's open payment and technology standards.

Currently, more than 400 games and apps use Facebook Credits, the company said in a statement on Tuesday. "We're open to developers and partners that want to experiment using credits in new and interesting ways, and we look forward to seeing what they come up with," it said.


On the Net: