Will Netflix Next Rival Be Warner Bros?

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Last month, Warner Brothers Home Entertainment Group acquired both Flixster and Rotten Tomatoes (which Flixster had acquired from News Corp).  The deal follows Warner’s move into an aggressive digital strategy which brought movie rentals to Facebook.

Combining the rentals on Facebook with the social movie discovery possible with Flixster could be a powerhouse of social networking and marketing centered on motion pictures.  Rotten Tomatoes, a movie reviews site, only sweetens the pot.

All of this seems to have caught Netflix’ attention, which has had problems with Warner in the past.  The company has ramped up some of its own marketing strategy and is now strongly pushing new deals with partners like Starz and HBO.  The company also recently bought and is financing two seasons’ worth of a very high dollar drama series with A-listers like Kevin Spacey to star.

This large push by Warner Bros. makes it obvious that the digital movie arena is where it’s at and everyone in the industry knows it.  Unlike the music industry, which is still languishing in a 1990s CD album-driven paradigm, the movie industry is coming to grips with the digital revolution and the business shifts they’ll have to make to stay in the game.  One advantage movie producers have over music is that movies still enjoy a fairly closed-circuit run through theaters before they become easily distributed via uncontrolled (aka “pirate”) networks.

Still, box office draw is falling while home theater and movie enjoyment is growing fast.  Streaming and digital delivery are becoming the fastest-growing sector of home movies now with stalwarts in the rental field like Blockbuster falling by the wayside.

Right now, it appears that Netflix and Warner Bros. are the two big players in this game with Hulu not far behind.

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