Netflix (NFLX 0.42%) will soon be able to share more on Facebook (FB +2.06%) than just the breaking news that CEO Reed Hastings controversially posts as status updates.
The U.S. Senate has followed the House of Representatives in passing a bill that does away with the ridiculously dated contents of the Video Privacy Protection Act. President Obama should sign it into law early next year.
The original act is the reason why folks can't seamlessly share information on what movies they're watching through Netflix on Facebook and other social sites. Netflix and Hulu were sued for earlier infractions, and Netflix settled out of that back in February.
It's a victory that's been a long time coming for Netflix, as the leading video service has been throwing its weight behind the original H.R. 2471 bill since last year.
What will this mean? Well, the good news is that it will make Netflix even more prolific. There are more than 25 million domestic streaming accounts for the service, but you wouldn't know it from your friends and family members on Facebook. They've been effectively silenced unless they just happen to peck out a status update specifically stating what they just saw through Netflix.
You can expect that to change in 2013.
For starters, Hastings knows Facebook better than most people. He should. He sits on the Facebook board of directors.
However, this should ultimately mean that Facebook subscribers opting in can begin sharing their rental histories with fellow Facebook pals if they want to. Those that decide to link their Facebook and Netflix accounts should -- in theory -- be able to do more than merely automatically broadcast what they're streaming.
On a basic level, posting that you're streaming an episode of the first season of Sherlock may seem as annoying as an Instagram sunset or molten lava cake, but keep thinking this through. Wouldn't it be useful -- as you're about to stream a movie or TV show -- to know what your friends rates it? Wouldn't it be neat to know the Facebook friends that saw a convoluted indie film so you can hit them up questions about what the heck happened after you're done?
Social sharing is a bigger deal than you think, and it will be a benefit -- and a Netflix retention tool -- for those using it correctly.
Netflix will also need to make sure that it stays at the forefront here. Amazon.com (AMZN +0.81%) may be a distant rival, but it also has more than a decade of customer reviews on movies. Amazon may very well view the law as an opportunity to finally start to gain some ground on Netflix.
Things are just getting interesting now that digital video will finally be able to come into its own in a social sharing future.
