Netflix Facebook Integration Clears Major Hurdle for US Launch

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Video streaming service Netflix crossed a major hurdle to launching its planned Facebook app in the US yesterday. Yesterday afternoon the House of Representatives passed HR 2471, a bill that would allow the service to roll out its planned Facebook integration.

This summer Netflix announced that it was launching Facebook integration which would allow the service to make recommendations to users based on what their friends were watching. The program could not be rolled out in the US, however, because of the 1988 Video Privacy Protection Act, which made revealing a person’s video rental history a federal crime punishable by a $2,500 fine for every instance. The bill that passed the House yesterday would amend the Video Privacy Protection Act to allow that “video tape service provider may obtain a consumer’s informed, written consent on an ongoing basis and that consent may be obtained through the internet.”

The bill, which still has to pass the Senate and be signed into law by President Obama, passed by a considerable margin, with 303 (227 Republicans, 76 Democrats) voting in favor and 116 (7 Republicans and 109 Democrats) voting against. Once the bill goes into effect, Netflix could roll out the service very quickly.

Bringing social integration to Netflix could provide a shot in the arm for the beleaguered company, which spent much of the summer hemorrhaging customers and with its stock in near free fall after a series of bad business moves, including a highly controversial price hike that doubled the cost of its most popular plan, and an aborted attempt to separate its DVD-by-mail and web streaming services into separate businesses. While Hollywood probably bears the brunt of the blame for the necessity of a price hike, Netflix’s handling of the announcement left much to be desired. The original announcement that Netflix/Facebook integration was in the works came in July, shortly after Netflix CEO Reed Hastings was appointed to Facebook’s board of directors.

Even though it has not gone into effect yet, this bill has already been beneficial to Netflix. The company’s stock rose sharply on the news. At close of trading yesterday the company’s stock was up 5.61% ($3.82) to finish at $71.96.

As noted above, the bill must still be passed by the Senate and signed by the President before it can take effect. There is no word on how long after that - assuming it happens, as seems likely - Netflix and Facebook will take to roll out the service in the US. However the fact that it is already active in other countries suggests that the company could have it ready to go very quickly, perhaps within a day of the bill becoming law.

What do you think? Are you excited about Netflix going social? Let us know in the comments.

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