Is Netflix Plus Facebook a Winning Business Combination?

Reed hastings

Facebook and Netflix (NASDAQ:NFLX) are in talks for a potential partnership, the New York Times says, citing Facebook CEO Mark Zuckerberg.

This could mean a lot of things, so let’s not get ahead of ourselves, but there are a couple of reasons why Netflix (NASDAQ:NFLX) investors might get excited about a potential Facebook-Netflix tie-up.

First, and most obvious, Facebook has a lot of users, so if Netflix (NASDAQ:NFLX)  gets prime placement on Facebook, it could drive Netflix subscribership.

But just as important, depending on how the Facebook integration works, it could lead to more unique personalization of the Netflix experience. This could eventually make it less desirable to share your Netflix account with family members, roommates, etc., and for each person to have their own account.

Whether that leads Netflix (NASDAQ:NFLX) to sign people up for more expensive family plans, or for each member of the house to get their own Netflix account — the way they each have their own Facebook account — that could lead to potential growth for Netflix beyond what it’s experiencing already.

So, more users, more revenue per household, or both. Sounds like a good partnership to make.

Netflix founder and CEO Reed Hastings talked about this potential future — where people have their own Netflix accounts, the way they have their own Facebook accounts — in our exclusive Q&A with him earlier this year. Click here to check it out.

Dan Fromer is a senior staff writer at Business Insider.

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