Warner Streams Movies Via Facebook, Sells Apps On Apple
A Goldman Sachs analyst said that Warner Bros.' deal to begin streaming some films on Facebook is only a modest threat to Netflix in the near term, but could become a "credible" one down the line, largely due to simple mathematics: Facebook has such a massive user base.
Since the Warner Bros. arrangement involves pay per view and not an unlimited viewing plan like Netflix, it is more of a challenger to iTunes and Amazon, notes Ingrid Chung, a Goldman analyst.
Also, she wrote that the Warner Bros. arrangement "lacks content" and "does not have wide distribution across devices that connect to the living-room TV," while there are "few people on the payments platform."
The deal allows pay-per-view renting or owning of films through Facebook's movie platform, where people can use Facebook credits for transactions. For "The Dark Knight," the first title available, the cost for rental is 30 Facebook credits or $3, and is good for 48 hours. Other titles will become available later.
Long-term, Chung wrote, Facebook has potential as a robust video provider with its 500 million users compared to Netflix's 20 million, and the social media aspect it offers. Users could recommend content to one another.
Warner also announced that it would make "The Dark Knight" and "Inception" available as app editions for Apple's iPad, iPhone and iPod. The new initiative is notable because it is 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.
App editions can be downloaded free via the App Store; they give users the first five minutes of a feature film and some bonus content. Customers can unlock the movie via an in-app purchase. The interactive features allow WB to bypass the iTunes Store.
The move allows Warner to sell "Inception" and "Dark Knight" in 35 territories, including 23 that did not have access to films in general through iTunes movie downloads, such as China and Russia. Apple will receive its standard 30% take on in-app purchases.
Warner is not the only studio utilizing movie apps. Paramount introduced "enhanced movie apps" for 10 feature-length films designed to play on smartphones running Microsoft's Windows Phone 7 software. Fox has added mobile functionality as a value-add to the Blu-Ray version of "Unstoppable," which allows consumers to transfer the film and extra features to Android phones.