Facebook Could Present a Credible Threat to Netflix

Mar 8, 2011
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Facebook's trial run of movie rentals could spell trouble for Netflix in the future, but probably not the near future. On Monday, Facebook announced the availability of the movie "The Dark Knight" for rental using Facebook Credits. Having one movie available for rental is not exactly competing with Netflix, which has thousands, but it is an interesting direction for the social media giant.


Users who rent "The Dark Knight" have full Facebook functionality while watching the movie, commenting, updating status, and chat. There is no doubt that there would be an appeal to watching a movie "with" friends on Facebook, so if the company decides to expand its offerings, this could present serious competion to Netflix. Especially considering that Netflix has 20 million subscribers, and Facebook has 500 million active users.

There is the issue of watching movies on your computer vs. watching on a television, but that is already becoming less of an issue, and the barrier will likely come down in the future. Goldman Sachs analyst Ingrid Chung said Tuesday, "Facebook 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."

Are you interested in a Facebook movie service? What do you think it should look like?

[via Hollywood Reporter]


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