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The social media and tech-savvy community has been abuzz this week in response to the news that Facebook has entered the business of digital video rentals. They’ve already taken the first step: Warner Bros. is now streaming its 2008 Batman film The Dark Knight (which happens to be the greatest movie ever made, but that’s a topic for another blog post) directly through Facebook. The cost is $3 or 30 Facebook credits for a 48-hour rental during which you can stream the movie.
Will this news lead to Facebook ultimately breaking into the digital video rental space in a bigger way, maybe even eventually surpassing Hulu or Netflix? They certainly do have some built-in advantages, most importantly the fact that hundreds of millions of users are already on their site discussing favorite movies and TV shows with their friends. Almost 4 million people already have “liked” The Dark Knight’s official page, so why wouldn’t some of them fork over a few bucks the next time they want to instantly re-watch their favorite movie, without ever leaving Facebook?
On the other hand, my suspicion is that most people hate the idea of spending money on their Facebook accounts in any way. True, the hardcore users of Farmville and other games DO buy credits to enhance their gaming experiences, but it remains a niche group of users that’s willing to do so. Also, Facebook must proceed with caution to avoid alienating less savvy users who might become confused if they can suddenly use the site to do a huge, potentially overwhelming amount of different things, like rent movies.
Despite the modest risks, this move seems to be a worthwhile gamble for Mark Zuckerberg and company to take. As Walker Sands’ own John Fairley pointed out to me this week, even if the new opportunity to rent movies doesn’t entice more users to sign up for Facebook accounts, if it catches on, it certainly could lead to existing users prolonging the already considerable amount of time they spend logged in. And that, of course, would help the continued growth of the company’s huge targeted advertising empire.
As for Hulu, Netflix, the somehow-still-existing Blockbuster stores, and other video rental companies, they’re probably at least a tiny bit worried. Any time a behemoth like Facebook decides to try to take a chunk out of your business, you have no choice but to take notice and react.
What do you think? Will Facebook be able to continue its hot streak and develop a successful video rental business?