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Why Facebook Movies Are No Threat to Netflix

Warner Bros. (WB) is trying something new: Making its popular movie The Dark Knight available for rent through Facebook. Users will be able to stream the film in their browser through a Facebook app on The Dark Knight fan page. It looks like Hollywood is trying to bypass Netflix (NFLX). Unfortunately, Netflix's all-you-can-eat subscription and Facebook's frustrating user interface almost guarantee that this experiment will fail.

Expensive, short-run movies won't fly
The Dark Knight test run is happening right now. From CNET:

Facebook users can use Facebook Credits to rent "The Dark Knight" through the movie's official fan page on the social-networking site, Warner said in statement. The movie can be rented for 30 Facebook credits or $3, and Facebook users will have access to the movie for 48 hours through their accounts on the social network.


To be clear, users will pay $3 to make a movie playable for 48 hours. Compare this model to Netflix, which offers unlimited streaming of thousands of movies for as low as $7.99.

For Warner Bros., this experiment serves two purposes. First, it allows Hollywood to test the waters and see if it can successfully pull off movie streaming without dealing with Netflix. Hollywood's relationship with Netflix has soured over the past year. Relative to Netflix's profit, Hollywood has realized that Netflix got its content for a bargain. It would prefer to sever the relationship with Netflix as soon as possible while still profiting from online movie streaming.

Second, Warner Bros. wants to make more money on its properties. In the case of The Dark Knight, if WB can appeal to Batman fanboys through the Facebook fan app, it might lure them into paying $3 to watch it again. The problem, of course, is that any hardcore Batman fan who likes the film enough to be on the fan page would already own the DVD and Blu-Ray, or, at the very least, has already rented it through Netflix or Redbox. WB is preaching to the choir, which pretty much means it can expect weak rental numbers.

Less than ideal format

User satisfaction with the Facebook interface seems to be at an all time low. First, the privacy concerns are just as strong as ever. Second, the web page design has been consistently changing at least once a month for the past year. As soon as users are getting used to Facebook's new design, the format is changed yet again.

How does this contribute to a positive movie experience? It doesn't.

TechCrunch's Jason Kincaid sums up the user experience nicely:

As for all those who were initially worried that this spells Netflix's demise -- I'm wondering if they actually tried watching The Dark Knight on Facebook. Because the experience isn't that great. Netflix and Hulu have built their services around content viewing and discovery. Facebook has an application platform, but it's very difficult for companies to build an app within Facebook that's nearly as immersive as these dedicated service.


Late last year Netflix said it was planning on integrating more with Facebook. At the time, I argued that Netflix would benefit from the move for a couple different reasons:
  • Spreading Netflix movie ratings throughout the web
  • Enabling online conversations while watching movies
The most important difference between Netflix and Warner Bros. streaming through Facebook is that Netflix actually gives users a choice free of charge: You can watch the film on your game console, TV, Apple device, or web browser. If you want to chat while watching a movie or see how your friends rated a movie, watch it through Facebook. On the other hand, Warner Bros. is asking users to pay a premium to watch it through Facebook, one of the worst user interfaces out today. Why would anyone sign up? For Warner Bros., it seems like a waste of both time and resources.

Photo courtesy of Adam & Tess // CC 2.0
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