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With Facebook, Warner Brothers Distributes Straight to Movie Fans

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Facebook | Warner Bros.

Last night I went on Facebook, clicked to the "Dark Knight" fan page, and a few seconds and $3 worth of Facebook credits later I was watching the film, crisp and clear on my laptop.

It was easy, and inherently social — I could share the experience with my friends or follow their suggestions to immediately watch the film.

This is a watershed moment for the movie studios as well as Facebook — it cuts outs companies like Netflix and Amazon and makes Facebook a new rising force in content distribution.

Warner Brothers is the first studio to rent streaming movies through Facebook. The company rolled out the test last night and here's how it works: Facebook users who say they like "The Dark Knight" can click to rent the title. For 30 Facebook credits or $3 they can start streaming the movie immediately, with access to it for 48 hours. This is just a test — only available to US Facebook users, and limited to "The Dark Knight," but within months the studio will add more titles, and it plans to *sell* digital versions of films through Facebook, presumably at a higher price point, in the "near future."

"This is a watershed moment for the movie studios as well as Facebook." -CNBC, Julia Boorstin

This is a major movie for Facebook, and not just because this is a new revenue stream. It gives Facebook users a new way to communicate and share with their friends — they can post comments on the movie and update their status on it. The studios are incentivized to work with Facebook, because they have more control over per-film pricing if they sell single film experiences, rather than selling a library of films to Netflix for unlimited streaming.

Facebook distribution isn't Warner Bros. only move to cut out the middle man — the company is releasing two movies as *apps* via the ITunes app store, bypassing the iTunes Movie store. "App Editions" for popular movies "Inception" and "The Dark Knight" includes games, trivia, soundtracks and soundboards, plus unlimited streaming or the ability to download the films. "Inception: App Edition" allows users to view the film for $11.99. The Dark Knight: App Edition charges $9.99 for viewers to access the older movie. This move allows the studio to sell the films to over 30 territories, including some countries like China and Brazil, which couldn't access films through iTunes.

Warner Brothers is the studio to watch — with the largest home video market share of any of its rivals, it consistently sets the standard for home entertainment. It picked Blu-Ray over HD-DVD and now it's on track to lead the next stage of digital distribution.

Questions? Comments? MediaMoney@cnbc.com