Movie explosion on Facebook, but where is Netflix?

For quite some time, Netflix has been the undisputed king of online DVD rentals. They were the first company to take advantage of the internet to help people find and watch the movies they wanted. They proved that there was a valid online business model in movies-as-a-service and not just movies-as-a-product. They pioneered the concept of the “rental queue”. They’ve been praised endlessly for their operational efficiencies. But that was the past, and it would appear that Netflix is facing the greatest threat they’ve ever seen. And no, it’s not Blockbuster or iTunes or Amazon.

It’s an 8 person shop in San Francisco.

Flixster is a mere one year old, and already they are one of the largest movie sites online right now. They have fully embraced the new platform and continue to refine their ever-changing application within Facebook. Every time I log in, there appears to be a change made or a feature added. It’s clear that they are comfortable evolving inside their new medium, and judging by the slowdowns and suspension of QuickRate, I’m guessing their also struggling to adapt to the influx of additional traffic. Now that they’ve firmly planted themselves as one of the top Facebook applications, one has to wonder if Netflix is starting to sweat.

Not too long ago, Netflix announced a contest to help them find a better way to “connect people to the movies they love”. I wonder what the winning solution will be? (Hint: Build an app for Facebook before it’s too late)

At the moment Flixster has the lead, but they lack the ability to fulfill my desire to actually watch movies (and not just rate them). This is Netflix’s one and only advantage, and they should act quickly to integrate themselves into the Facebook platform to take advantage of it. Users should be able to quickly rate, review and add movies to their rental queue within the Facebook world. People should be able to proudly display their queue so their friends can see what they’re watching now and what they’ll be watching next.

Quite frankly, if Netflix is going to survive, they need to displace Flixster and become the dominate movie application on Facebook. I just wonder if it’s already too late?