: Social networking service “Facebook” is born with limited membership to Harvard students to share profile photo, personal facts and option to extend network by invitation. Gains instant popularity among students and a new journey begins.
There are several Video on Demand (VOD) service providers in the market today like pay per view from cable/satellite/IPTV service providers, Amazon VOD, iTunes, Hulu, Netflix, CinemaNow and alike but what brings an unparalleled advantage to Facebook is its live, diverse, active and massive user base – Facebook is now used by 1 in every 13 people on earth and over 250 million+ users login to facebook every day (more on statistics
). Introducing a service on the medium where users spend lot of time is a smart move – with a rental cost of 30 Facebook credits or $3, users gain full control over the movie (flexibility to pause/play) while watching it through their Facebook account for up to 48 hours from the time of purchase. Facebook’s entry into movie rental business (so far only Dark Knight is available from Warner) is bound to influence ecosystem players, lets explore them briefly…
Extending the platform for paid content distribution brings business diversification, additional revenue stream from movie rental sales, insights to consumer behavior for advertising and an avenue to further engage users online for still longer duration.
Good value addition, decent pricing and the flexibility to rent a movie within your favorite Facebook territory. It may well start a trend in community movie viewing and fan clubs leading, organizing movie watching events – customized pricing for group watching?
Studios and Content Owners
Great opportunity to expand and bring paid content directly to the consumers on the platform they are so grossly connected resulting in additional revenue stream (with better margins). Engage audience for future online content consumption, gain publicity and insights to viewer-ship and consumption patterns
Existing Paid Content Service Providers
In the current form Netflix, Hulu and alike may not be threatened but if other studios follow the lead along with growth of connected TVs (open browsers and inbuilt Facebook apps) coupled with increase in PC/ mobile device based movie consumption – it holds potential to pose a serious challenge in future. But where it stands today it may still take a while to build large content libraries and a more attractive pricing package since the competitive bar is way too high…
Facebook entry in paid movie rentals segment in partnership with Warner may trigger other social networking sites, studios and content owners to start collaborating to bring movie entertainment experience to the social networking medium. While users get to enjoy this new feature, its success may well depend on pricing (new movies, SD/HD formats) and content availability in the future