Film company Miramax is testing a direct video rental service that may allow it to bypass larger streaming and digital media sales and rental firms. Miramax will use Facebook for its interface, offering free streaming of trailers, and currently offers rentals on 20 films, some of which have yet to be made available to other distributors. One distinct difference with the Miramax offerings is that it is also making some films available outside the U.S. !0 titles are available to Facebook users in the U.K. and Turkey, and there are plans to open access to users in France and Germany. Direct sales (or rentals) to consumers can have the benefit of bypassing intermediaries in the distribution stream, letting content owners capture more of the retail revenue stream (or conversely, offer content at a lower price). In this case, not the entire stream, as Facebook takes a chunk for running the payment system.
Besides direct film rentals, the Miramax eXperience Facebook site can help with branding and promotion efforts. The site will offer free streaming of trailers, and will host a online game that lets users cast themselves and their friends from Miramax movies, with rewards of unlocking bonus content as they play.
While the potential to capture more revenue is enticing, developing a new market and distribution system can be daunting. In addition, the current online video services offer consumers better experiences (some early users of the Miramax Facebook site say it's not quite up to the standard of Netflix, Amazon, or Apple); a wider range of content options (Miramax only offers films it distributes); and intelligent recommendation systems that can help users find programming that they might be interested in. It seems unlikely, at this point, that direct marketing will replace the large aggregators totally, but it can be an additional revenue stream that content producers and distributors may want to take advantage of. And it can have considerable potential in terms of film promotion, building relationships with consumers, branding, and fan service. It is the mix of value streams which is prompting more and more content producers/distributors to add direct sales to their revenue mix.
Source - Miramax app the Largest Streaming Deal on Facebook Yet, Broadcast Newsroom
Miramax, Facebook Team for Streaming App, The Wrap