U.S. will have to wait. Canada and Latin America will soon be able to avail Netflix services on their Facebook account, as per the Netflix Q2 earnings report. The video rental and streaming company said the hurdle to integration of Netflix with Facebook in U.S. is the Video Privacy Protection Act (VPPA).
The video-sharing company wrote in its earnings press release:
We’ve made great progress over the quarter on our Facebook integration, and we’ll likely launch it before our next earnings report. At this point, we plan to launch this initiative only in Canada and Latin America, as the VPPA (Video Privacy Protection Act) discourages us from launching our Facebook integration domestically. Under the VPPA, it is ambiguous when and how a user can give permission for his or her video viewing data to be shared. A bipartisan group of lawmakers has introduced a simple clarification, HR2471, which says when and how a user can give such permission. We’re hoping HR2471 passes, enabling us to offer our Facebook integration to our U.S. subscribers who desire it.”
VPPA specifically prohibits those who rent, sell or deliver pre-recorded video cassette tapes or similar audio-visual materials from disclosing personally identifiable information such as rental history or genre preferences to anyone without written consent or a warrant. Companies that violate the law are liable for up to $ 2,500 for each default.
LA Times reporter Ben Fritz recounts, “Blockbuster, the struggling movie rental store chain (which also offers online streaming in competition with Netflix) learned the hard way about the VPPA law. In 2008, a Texas woman sued Blockbuster alleging that it violated the the law when it shared her rental history with Facebook.”
However, there is hope for viewers Stateside. A VPPA-clarifying bill HR2471 which is currently under review would allow users to give consent digitally, such as through Facebook extended permissions.
Apparently the VPPA does not apply to all-digital video streaming company. Hulu, which integrated with Facebook earlier this month allows users to share their viewing history with friends. This could be because Hulu does not rent, sell, or deliver any physical media.
Though, at present the Netflix website has no integration with any social media platform, nor a ‘Like’ or Tweet button, social media giant Facebook has driven the Netflix growth. Subscription to the service are frequently found as on option on the offer walls of social games, allowing games to earn Facebook Credits, proprietary virtual currency and virtual goods for signing up.
This soon-to-be-real integration with Facebook, in Latin America and Canada, potentially followed by U.S. could boost virality for Netflix. Facebook users could receive recommendations or even previews of contents their friends are watching, leading them to sign up for the subscription.
The integration could also have Netflix-specific features such as allowing users to share their DVD shipping queue with friends or having a collaborative queue.
The coming together of the video rental company and the social media giant would give a push to the former’s long-term strategy of attracting customers towards streaming and away from shipped DVDs.
Facebook integration should likely be easily achieved as Netflix Chief Executive Officer Reed Hastings was added to Facebook’s board of directors during the second quarter.