Netflix Adds Social Options, Facebook Ties for U.S. Users

March 13 (Bloomberg) -- Bloomberg West Editor-at-Large Cory Johnson reports on the alliance between Facebook and Netflix to gather and use information on you entertainment "likes." He speaks on Bloomberg Television's "In The Loop."

Netflix Inc. (NFLX), the online video service, began offering U.S. subscribers the ability to peer into each others’ digital movie libraries through an expanded partnership with Facebook Inc. (FB)

The software, updating features offered to non-U.S. customers since 2011, will become available starting today, the Los Gatos, California-based company said in a statement. Users who opt in will see two new rows on their Netflix home page that show friends’ activities, and have the option to post films or television shows to Facebook and comment on them.

Netflix Chief Executive Officer Reed Hastings lobbied Congress to change U.S. law and put his alliance with Facebook into full effect. With about $5 billion in long-term content obligations, he is counting on the social component to increase word-of-mouth about Netflix’s growing digital library and build loyalty to the $7.99-a-month subscription service.

“Social is going to be everything,” Hastings, 52, said in a January interview. “Our kids are way more social than us; their kids will be way more social than them. You tell your friends about what you watch and they’ll watch much more of what we offer.”

All 27 million U.S. streaming Netflix customers will have access to the social features by the end of this week, said Joris Evers, a spokesman. Users who opt in will see “Friends’ Favorites” and “Watched by Your Friends” rows added on their Netflix home page.

Photographer: Norm Betts/Bloomberg

Netflix Chief Executive Officer Reed Hastings said, “Our kids are way more social than us; their kids will be way more social than them. You tell your friends about what you watch and they’ll watch much more of what we offer.” Close

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Photographer: Norm Betts/Bloomberg

Netflix Chief Executive Officer Reed Hastings said, “Our kids are way more social than us; their kids will be way more social than them. You tell your friends about what you watch and they’ll watch much more of what we offer.”

Judge Bork

International users will also receive the update, Evers said. About 15 percent to 20 percent of Netflix’s 6 million customers in Canada, Latin America and the U.K. adopted the older version of Facebook integration, which didn’t let users choose what they post about their viewing habits.

Netflix rose 5.6 percent to $192.36 in New York, their biggest gain since Feb. 6. The stock has more than doubled this year on investor optimism that new content deals and original programming such as “House of Cards” will pull in viewers.

Adding social features was made possible in the U.S. by changes to the Video Privacy Protection Act of 1988, which barred movie-rental companies from sharing people’s viewing records. Hastings successfully lobbied Congress to change the the law, which was passed after a newspaper obtained and published Supreme Court nominee Robert Bork’s rental history.

Hastings, who also sits on Facebook’s board, flew to Washington last fall and met with Democrat Patrick Leahy, chairman of the Senate Judiciary Committee and sponsor of a bill to amend the video disclosure law.

Lobbying Effort

The online service spent $1 million on 2012 lobbying, double the $500,000 of a year earlier, according to the Center for Responsive Politics, a Washington-based research group. President Barack Obama signed it in January.

Facebook CEO Mark Zuckerberg had a hand in the look of the new integration layout. In a September 2011 meeting, he suggested one of the biggest changes, letting users see pictures of close friends and relatives and their viewing choices instead of the previous version’s random sampling of friends based on recent activity, according to Tom Willerer, vice president of product innovation at Netflix.

People are more likely to want to know what those closest to them watch and like, Zuckerberg told the teams.

Netflix, which is gearing up to stream four more originals series by summer, including the cult favorite “Arrested Development,” doesn’t plan to stop with the latest social update, Willerer said. The company is testing and may make available this year new individual profiles that deliver a more accurate view of viewing habits, he said.

Depending on the outcome of research, viewers also may get the ability to post viewing choices to Twitter or add a “share” button inside video streams, Willerer said.

To contact the reporters on this story: Cliff Edwards in San Francisco at cedwards28@bloomberg.net; Eric Engleman in Washington at eengleman1@bloomberg.net

To contact the editors responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net; Bernard Kohn at bkohn2@bloomberg.net

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