Reed Hastings, CEO of Netflix, will be joining the board of directors at Facebook, signaling potentially larger tie-ups between the two firms in the near future.
Netflix, which was founded in 1997 and once boasted the largest movie DVD delivery services, has in recent years focussed on on-demand video streaming and has become one of the largest players in that market. Meanwhile, Facebook is the world’s largest social network.
Facebook is believed to have recently surpassed a total of 700 million users, according to data released by Internet measurement companies comScore and Hitwise. Netflix said that it had 23.6 million subscribers in April 2011, who can order DVDs by mail or watch a limited subset online on the Internet.
Netflix’s Internet video streaming is widely supported on a variety of devices that have grown in popularity recently, such as the Boxee, Roku, Apple TV and some Google TV set-top boxes. In addition, Netflix movie streaming is supported a wide range of DVD and Blu-ray players shipped by prominent suppliers such as LG Electronics, Phillips, Sony and Sharp, as well as Microsoft, Nintendo and Sony game consoles, adding to its popularity.
Investors seemed to be happy with the move; stocks for Netflix were up during trading at the end of the day.
Facebook is the world’s largest social network and doesn’t seem to be showing signs of slowing. But the social giant is not seeking to rest on its laurels, and is seeking to increase its video and music offerings and take a slice of the rapidly growing market. In May, it announced a partnership with Warner Brothers under which Facebook users would be able to rent and stream Warner movies, using Facebook Credits or $3 as payment.
Facebook issued a statement by Mark Zuckerberg on Thursday about Hastings’s appointment. It said that the Netflix CEO has "built a culture of continuous rapid innovation."
Rapid innovation is something that both Netflix and Facebook appear to be doing in the rapidly growing online video and music business, a sector that once almost exclusively been dominated with Apple’s iTunes, but is now coming under increased competition from the likes of Amazon and Google.