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Facebook renting movies

"The Dark Knight" on Facebook.

TEXT OF STORY

Kai Ryssdal: Here's your semi-regular update on the ever-expanding Facebook economy. There was news this morning that Warner Bros. is going to be the first studio to stream its films over the king of social networks. Warner's offering a 48-hour rental of "The Dark Knight," the latest in the Batman franchise. The price is 30 Facebook credits, $3 to you and me.

Marketplace's Steve Henn reports it's just another dip into the pot of gold for Facebook, but a potential nightmare for Netflix.


Steve Henn: If I ran Netflix, I would be slightly sick to my stomach right now. Six hundred million Facebook users can stream "The Dark Knight" online right now. But if they want to watch that movie on Netflix, they have to wait for a DVD to come through the mail.

"The Dark Knight": I have a vision of the world without Batman.

Netflix has a vision of a world without DVDs, where all movies are streamed online, ideally using a Netflix subscription. The company already has thousands of titles you can watch this way. But the big studios won't let Netflix stream the really good stuff. They're still nervous that one company could dominate the online business.

So that's why Warner Bros. approached to Facebook to stream "The Dark Knight." The deal couldn't be simpler -- Facebook takes 30 percent of each download.

Atul Bagga: I think for studios definitely the model is appealing.

Atul Bagga is an analyst at Think Equity. He says Facebook doesn't have anything that resembles an online movie store yet, but:

Bagga: We have already seen Facebook has caused a big disruption in the gaming world.

Social games on Facebook, like Farmville, have taken off while game consoles like Sony's Playstation are struggling.

Justin Smith runs the site Inside Facebook.

Justin Smith: Whenever Facebook starts experimenting with a new product and a new market, I think all the companies -- particularly the leaders, like Netflix -- should pay close attention.

Warner Bros. is describing "The Dark Knight" rental deal as a test, but executives there say if this works, they will also try selling movies on Facebook.

In Silicon Valley, I'm Steve Henn for Marketplace.

About the author

Steve Henn was Marketplace’s technology and innovation reporter for the entire portfolio of Marketplace programs until December 2011.

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