Warner Bros. Teams with Facebook on Movie Rentals
Warner Bros. Digital Distribution said Tuesday it will begin testing movie sales and rentals through the Warner Bros. Entertainment Facebook page. Consumers will use Facebook Credits to buy or rent select titles while remaining within Facebook. According to Warner Bros., fans who “like” The Dark Knight can rent the title through that page and begin watching the movie “within seconds.” The rental fee is 30 Facebook Credits or $3, Warner said. A member buys Facebook Credits using a credit card, PayPal account or a mobile phone. The movie offer is available only in the U.S., Warner said, and additional titles are slated for availability over the next few months.
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Fans will have “full control” over the film while watching it through their Facebook accounts for up to 48 hours after paying, Warner said. Viewing control options include full screen, pause, and resume play upon return to Facebook. A user will be able to post comments on the movie, interact with friends and update status while the movie is playing, it said.
When we tried to gain access to the movie from our New York location, we received a message saying “SSL Not Enabled.” A disclaimer on the Warner site said the offer “is not valid in all states.”
As to whether Facebook can challenge Netflix, Goldman Sachs analyst Ingrid Chung said there’s no immediate threat to Netflix, since the Facebook model is pay-per-view, it’s short of content and it doesn’t have wide distribution across devices that connect to the TV. It’s more of a threat to Amazon and iTunes for the near future, she said. Long term, Facebook’s strengths include its 500 million active users versus Netflix’s 20 million subscribers, friends’ recommendations and a growing base of compatible video devices, Chung said. Facebook’s foray into pay-per-view “does not impact our Netflix estimates,” she said, but “represents a new potential entrant that few in the investment community were concerned with prior to this announcement, so we believe it does indeed represent an incremental negative for Netflix shares.” The announcement had no effect on Goldman’s rating or price target for Netflix, Chung said.
Last month, Warner released Inception and The Dark Knight through Apple’s iTunes apps store for playback on the iPhone and iPad. The free movie apps allow users to view scenes, trailers, games and other movie information, along with a five-minute movie preview. To view the full movie, users buy access through their devices at $18.99 for Inception and $9.99 for The Dark Knight. Unlocking the movie through an app allows viewers to download the movie or stream it an unlimited number of times. The titles also are available through the movies section of the iTunes store for $14.99 a purchase and $3.99 a rental for Inception and $9.99 and $2.99 for The Dark Knight.
The app distribution model is significant because it’s “the first time films have been made available for Apple’s iOS devices outside of a content deal with Apple or other third party, such as Netflix,” said Laura Aguilera, research analyst at IHS Screen Digest. The app model gives Warner movie distribution in 35 territories, she said, including 23 that did not have access to films through iTunes movie downloads, including China, Russia, Greece and Portugal.
Social-networking support and other interactive features seem “to have been just enough for ‘App Editions’ to get through Apple’s latest App Store approval guidelines,” which require that media-only content be submitted to the iTunes Store, not the App Store, Aguilera said. Apple will receive its standard 30 percent take on in-app purchases, which she suggested means Warner is “more interested in driving a wider global reach from app editions than maximizing profits.” Warner will have to pay per stream every time a film is viewed from within an iTunes app, she said.