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Facebook advances further in the drive to become a portal to the entire internet after signing a deal with Warner Brothers to test a service that will offer select movies for purchase or rental through the public pages of these movies.

To rent the movie, Facebook users in the United States have to visit the movie's Facebook page, and start watching the movie from there. The rental period lasts for 48 hours -- twice the standard from other streaming services

Users will have full control over the film while watching it through their Facebook account within the rental period and can choose to watch it in full screen, pause the movie and resume playing it when they log back into Facebook.

Consumers will also have full Facebook functionality including the ability to post comments on the movie, interact with friends and update their status.
"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."

It's the first major Hollywood studio to work with the social networking giant in this way.

With more than 600 million active users, Facebook could become a serious competitor to digital distribution companies such as Hulu and Netflix.

“While officially dubbed a test, we expect to see more studios get behind the effort given the large platform and higher price point," wrote Jefferies analyst Youssef H. Squali in a note to investors. He added that he sees the Facebook-Warner Bros. deal as "yet another caution sign" against movie rental company Netflix Inc.'s high stock value.

"With Facebook's entry, the competitive playing field is getting crowded," the analyst said. "We expect this competition to curtail Netflix's subscriber growth and drive higher content costs, impacting revenue growth and (profit) margins over time."

This comes as a good opportunity for Facebook to establish Facebook Credits as an important online currency.

Facebook, which makes money mostly through online advertising, takes 30 per cent of the revenue from sales by third parties on the website using Credits.

More than 400 games and applications use Facebook Credits.

"We're open to developers and partners that want to experiment using credits in new and interesting ways, and we look forward to seeing what they come up with," the company said in an emailed statement on Tuesday.

The service will only be available to Facebook users in America to start with, but if it proves successful it could roll out to other countries around the world including the UK.

Warner Brothers will start the trial with The Dark Knight, the 2008 Batman movie from Christopher Nolan, and Facebook users will have to pay 30 Facebook credits (about £2.80) to watch the movie.