No wonder Netflix shares are taking it on the chin this morning - Warner Bros. will begin offering movies on the social networking site through a rental app. From the WSJ:
The studio asks users to pay with Facebook Credits, an in-house virtual currency that Facebook rolled out in January to all developers of apps on its site. Used largely by game companies, Credits are a mandatory universal payment system for buying digital and virtual goods, for which Facebook takes a 30% commission. The "Dark Night" video costs 30 credits, the equivalent of $3, for a 48-hour rental. Consumers will have full Facebook functionality during the viewing experience, including the ability to post comments, status updates and interact with their friends. The program is available only to consumers in the U.S.
Who knows how successful this will be. Different methods of distributing movies digitally have popped up over the last few years and very few have gained any traction. But Facebook is a daily experience for people, and that has to be an advantage. Netflix, which is especially vulnerable to such an incursion, also faces competition from Amazon.com's subscription-movie and TV-streaming service.