Could ‘Watched On’ Facebook News Feed Stories Save Netflix?

After a disastrous Q3 2011, Netflix stands to replace some of the 800,000 subscribers it lost. It’s savior? The Facebook news feed. Earlier this month, the House of Representatives passed a revised bill to change the Video Privacy Protection Act of 1988 to allow people to opt in to having their movie rental activity shared. This Act had delayed the Netflix Facebook app‘s launch in the US. Now the Facebook news feed is beginning to show “Josh Constine watched The Walking Dead on Netflix” stories that point back to the Netflix site. After being enticed by something a friend has watched, Facebook users might sign up and pay on so they can watch too.

So far we’ve only spotted these stories coming from Facebook employee profiles. Above you can see how they look (ignore the Netflix logo I added). They would appear in the Ticker, news feed, and Timeline. They may just be tests in preparation for the official US launch of the Netflix Facebook Open Graph app. Regarding the roll out of the news feed stories, Facebook declined to comment and we’re awaiting a response from Netflix.

The Facebook Open Graph platform launched at f8 in September has helped Spotify gain millions of daily active Facebook users. This contributed to the 1.5 million new paying subscribers it pulled in this year. That kind of growth could help Netflix bounce back from a price hike that scared off subscribers, an embarrassing scrapped move to spin out its DVD rental business, and its plummeting stock price.

Despite these issues, twice as much time is spent watching videos on Netflix than on its competitor Hulu. The TV studio-backed Hulu launched its own Facebook app in July, and then pushed an Open Graph version at f8 which offers several ways to share videos with friends. Netflix could grow its lead over Hulu through the US release of its Facebook app and the viral distribution it would receive through the news feed.

Netflix won’t be the only company capitalizing on Facebook’s Open Graph platform, which can automatically share a user’s in-app activity with their friends. Facebook yesterday announced that non-partnered third-party developers would begin to have their Open Graph apps approved in January. That means in addition to seeing what friends “read”, “watched” or “listened to”, any developer will be able to gain news feed, Ticker, and Timeline exposure for their apps.

Until then, Ticker and Timeline are a bit sparse, providing added visibility of apps like Spotify and The Washington Post reader. Netflix should be hoping to get its app legal for US launch before Facebook gets more crowded.

Update 12/29/2011 10pm PST: A Netflix spokesperson confirmed that “currently only Netflix employees and non-US members can connect their Netflix and Facebook accounts. Unfortunately US members can not currently connect their Netflix accounts to Facebook because of the ambiguous Video Privacy Protection Act. We hope this will change soon.”