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Facebook: No VOD Attraction

22 Aug, 2012 By: Erik Gruenwedel

While Facebook has become a punching bag of sorts on Wall Street, it’s an on-again-off-again love affair to Hollywood. 

With more than half a billion members globally, the social media behemoth is the go-to source for interacting with friends and peers about movies and entertainment. That discourse, however, does not apply to transactional video-on-demand, as Facebook friends appear to have little or no interest in paying to watch movies on the site, according to a recent webcast.

More than 50% of Facebook users with broadband connectivity said they would not pay $1.99 to watch a recently released movie on a social networking website, according to a Q3 2011 survey of 500 broadband households conducted by Parks Associates. About 12% said they would pay the fee for a 48-hour window.

That percentage stayed the same for rentals costing $2.99, but then increased among naysayers to 58% for the $3.99 price point. About 60% of respondents said they would not pay $4.99 for a new-release movie on VOD, compared with about 10% of respondents who said they would pay the fee.

To date, only about 15 movies have been made available on Facebook by studios for transactional VOD — a practice that began March 8, 2011, with the availability of The Dark Knight from Warner Home Video. Facebook offered the title for rent for 30 Facebook credits or $3.

“Users just don’t want to pay and are not very interested in accessing movies on social networks,” Parks research analyst Pietro Macchiarella said during the July webcast.

Macchiarella attributed the muted interest to user concerns over privacy and the fact that most people access the Facebook through a browser, which he said is the not the ideal way to stream video.

Meanwhile, Facebook ended July with 53 million unique video viewers — a distant second to perennial leader YouTube, which topped with 157 million unique viewers, according to data from comScore. The average Facebook viewer watched 21.7 minutes of video content, which was up from 17.9 minutes during the same month in 2011 when the social media site ranked third behind music video site Vevo and YouTube.

Facebook also upped its video viewership to more than 53 million unique users compared with more than 51 million last year.
As more users access social networks through portable devices such as tablet computers, media players or connected TVs, the analyst contends the percentage of users willing to pay to watch movies could increase.

While movie rentals remain a work in progress on Facebook, social media is a growing tool for recommending movies and TV shows to watch, according to Parks. Indeed, the appeal of social media with regards to movie recommendations is what prompted Warner last year to acquire Flixster.com along with movie review site, RottenTomatoes.com.

Among 372 households queried in the first quarter of this year, about 35% of respondents said they watched a movie or TV show because someone recommended it to them — including more than 12% on Facebook. By comparison, more than 40% watched a movie or program because a family member wanted to, and about 55% picked a title because of a TV ad.

Macchiarella said recommendations via social networks will increase as more users access portable media devices (or second screens) while watching TV. Nearly 18% of respondents in the same survey said they read comments made about a movie or TV show on Facebook on a daily basis, compared with 15% on a weekly basis and 10% monthly.

“A lot of media companies are using the second screen data to qualify the TV watching experience, which creates opportunities for advertising and for content providers to promote their programs,” he said.

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