Facebook: The Future of Online Video Rentals?

batman facebook

Users have become increasingly comfortable with Facebook as a place to watch videos, catapulting the social network into the top 10 video destinations on the web in the U.S. But will they also pay for movies from big time studios?

That question might soon be answered, as Warner Bros. has made The Dark Knight available to Facebook users as a low-cost rental directly through the social networking site. As first reported by The Hollywood Reporter, the movie can be rented for 30 Facebook credits, or approximately $3. Users who pay for the rental will have 48 hours after purchase to watch the movie, which can be paused, resumed and displayed in full screen mode. The Facebook implementation also has all the social hooks one might expect from the site: Users can like, comment on and share the movie with their friends from directly within the Facebook app.

For Warner Bros., the decision to rent The Dark Knight online is just one more in a series of experimental moves that the studio has made in recent weeks. It also made the second film in the Batman franchise available as an app purchase on the iOS platform, along with last year’s blockbuster hit Inception. That distribution strategy — releasing films as apps — was done in part as a way to reach movie fans in markets in which Apple’s iTunes movie store is not available.

In many ways, The Dark Knight is the perfect film with which to launch these kinds of tests. The vast majority of consumers who would have bought the movie on DVD or Blu-ray will have already done so, but it still has tons of fans that might enjoy watching it again, even if they don’t actually own it. Making the movie available as a low-cost rental can only add incremental value from a potentially untapped market.

The usage of Facebook credits as currency also, like the iTunes implementation, has the ability to open up rentals in markets where mature on-demand online video libraries might not exist. As a global network, Facebook gives studios like Warner Bros. the opportunity to reach an audience that it might not have tapped otherwise.

That said, we’re skeptical that Facebook will become a large-scale video rental opportunity for studios based on the current implementation. Users who want to watch The Dark Knight have to go to the film’s official Facebook page in order to click through to the actual film rental. In other words, they have to know what they’re looking for — and have their account set up to pay with Facebook credits — in order to take advantage of the offer. Even for a movie that has nearly 4 million Facebook fans, that seems like a cumbersome process.

At the same time, there are user adoption issues with making online rentals available through non-traditional channels, and we’ve seen other huge online destinations fail to make much of a dent in the online VOD space. Take, for example, YouTube. Despite having a massive audience of online video viewers, its rental store has failed to gain much traction with actual users.

Granted, YouTube never had a hit as big as The Dark Knight for its viewers to watch. But if a huge, global video site like YouTube can’t build a business from online rentals, it’s difficult to see Facebook being able to pull it off. That said, even if it isn’t a big hit, the Warner Bros. Facebook experiment is likely to teach the studio about how it can better use social tools to profit off digital distribution of its films.

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