Yesterday Facebook and Time Warner (NYSE: TWX) announced that "The Dark Knight" would be debuting on Facebook, and consumers would have the ability to pay for the movie using Facebook Credits, which is starting the virtual currency revolution.
It will cost 30 Credits, or $3 for a 48 hour rental. If the trial is successful, which many expect it will be, this will lead to the explosion of Facebook Credits, which could make Facebook seem cheap at these levels. The last valuation for Facebook was $65 billion, which is a staggering number, but if it can become the go to financial middleman, then this could tack on another $5-$10 billion in market value, by a conservative estimate.
The company takes a 30% cut of the sale for billing and payment security, and while Paypal already offers this and more for less, Facebook has digital content production going for it, while with PayPal, you're buying physical goods, which cost more to make. One more piece of digital content doesn't cost much, if anything. You have 600 million users on Facebook, making it the most visited place on the web. Just look at Zynga's valuation, which runs almost exclusively on Facebook.
Facebook also recently announced that it will require all game developers that use its platform to process payments through Facebook Credits starting July 1, 2011.
"Facebook has become a daily destination for hundreds of millions of people," said Thomas Gewecke, President of Warner Bros. Digital Distribution. "Making our films available through Facebook is a natural extension of our digital distribution efforts. It gives consumers a simple, convenient way to access and enjoy our films through the world's largest social network."
Remember, Goldman Sachs invested in Facebook at a $50 billion valuation. You think Goldman would invest in the company if it didn't think it was worth substantially more than $50 billion? It seems as if Goldman already has a hit on its hands, and all we have to show for it so far is "The Dark Knight." What happens when Avatar, Ghostbusters, and other popular movies begin to appear on the platform?
A famous line in Ghostbusters says, "Who ya gonna call?" I know who I'll be calling. My banker. To help me count the profits.
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