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3/9/2011
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Facebook, Warner Bros. Ink Movie Rental Deal

The Hollywood studio is making feature films available through the social network in exchange for Facebook Credits currency.

Warner Bros. on Tuesday became the first major Hollywood studio to begin offering movie rentals through Facebook, kicking off its foray into the social media film market with its Batman hit, The Dark Knight.

Any of the almost 4 million Facebook accountholders who hit the "Like" button on Warner Bros.' The Dark Knight page now can rent the movie for 30 Facebook credits -- or $3 -- by clicking a "rent" icon. The rental agreement lasts for 48 hours from the time of purchase, and viewers can watch in full screen, pause, and resume when logging in and out of Facebook. In addition, users can post comments about the movie and update their statuses while viewing the film. Currently, the service is only available to users in the United States, according to Warner Bros.

Warner Bros. will make additional titles available for rental and purchase on a regular basis over the coming months, the company said.

"Facebook has become a daily destination for hundreds of millions of people," said Thomas Gewecke, president of Warner Bros. Digital Distribution, in a statement. "Making our films available through Facebook is a natural extension of our digital distribution efforts. It gives consumers a simple, convenient way to access and enjoy our films through the world's largest social network."

"Right now, more than 400 games and applications use Facebook Credits to give people a convenient and safe way to buy virtual and digital goods on Facebook. We're open to developers and partners that want to experiment, using Credits in new and interesting ways, and we look forward to seeing what they come up with," a Facebook spokesperson said.

The average American spent more than 14 hours watching online video in December 2010, a 12% increase from the prior year, according to ComScore. Likewise, U.S. users streamed a record 201 videos, an 8% increase from December 2009, ComScore reported.

This is the second time Hollywood and social media have crossed paths this week: On Monday, YouTube -- which acquired its Next New Networks, marking the company's first step into content-creation -- announced it had hired Alex Carloss, head of digital distribution at Paramount for the past six years, to join the content-acquisition team, working with Robert Kyncl, who moved to YouTube about seven months ago after a seven-year career at Netflix, according to LinkedIn.

The news of Warner Bros.' partnership with Facebook immediately impacted Netflix, with the provider of subscription-based Internet streaming services' stock plunging 6% on Tuesday. Nervous investors were, perhaps, reacting to the idea of additional competition from Facebook. Netflix's stock was $193 Wednesday morning, down 2.45%, according to the company's Web site.

In its fourth quarter, ended Dec. 31, 2010, Netflix reached 20.01 million subscribers and earned revenue of $596 million, the company said in its earnings report. This was a 25% increase over the year-ago quarter's revenue of $445 million, according to Netflix. For the quarter, net income grew 34% to $47 million from $31 million in the fourth quarter of 2009, it said.

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