has decided to extend its social features to its US subscribers.
The streaming services provider announced new features that will
enable US subscribers to link their Netflix accounts to
The integration not only allows Netflix subscribers to see
their friends' choices but also share their choice of favorite
movies and videos on Facebook. In order to do so, subscribers are
required to add "Friends' Favorites" and "Watched by your
friends" rows to their Netflix interface.
Netflix has been providing the Facebook integrated service to
its international customers in Canada and Latin America over the
last one year. However, the Video Privacy Protection Act of 1988
prevented Netflix from offering the service to US customers.
The Act passed in 1988 protects consumer privacy against a
specific form of data collection. The Act prevented disclosure of
personally identifiable rental records of "pre-recorded video
cassette tapes or similar audio visual material". However, in
late 2012, the United States Congress passed a bill, which
removed the restrictions under the Act.
The integration is expected to be beneficial for both Netflix
and Facebook going forward. The integrated service is expected to
boost customer engagement, thereby boosting Netflix's subscriber
base going forward. Meanwhile, Facebook can use viewer's choice
data to target relevant ads.
However, we believe that Netflix will not be the sole gainer
from the newly-amended Act. Netflix competitors such as Hulu will
also benefit from the new rules as it already began offering
Facebook integration to its user's way back in 2011.
In such a scenario, we believe that Netflix's superior content
will be the ultimate deciding factor in the ongoing battle for
online supremacy. Netflix's new and exclusive content offerings
to its subscribers are the company's biggest USP compared to its
closest peers, Hulu, HBO,
as well as the newly-launched services from cable and media
companies such as
We believe that improving paid subscriber base, international
expansions, diversified content portfolio and a huge video
library are the positives in the near term. Moreover, Netflix's
own content delivery network, Open Connect, connects its video
library directly to Internet service providers, ensuring fast
data transfer to enhance customer experience. This will further
improve customer engagement going forward.
Currently, Netflix has a Zacks Rank #2 (Buy).
AMAZON.COM INC (AMZN): Free Stock Analysis
COMCAST CLA SPL (CMCSK): Free Stock Analysis
FACEBOOK INC-A (FB): Free Stock Analysis
NETFLIX INC (NFLX): Free Stock Analysis
To read this article on Zacks.com click here.