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Popcorn and DVDFirst Netflix announced a new pricing model last year where subscribers would be charged separately for access to streaming service and for rental of DVDs/Blu-Rays instead of the single charge for both that had been in place. The total charge, of course, was more than the single charge that had been paid for both services.

Despite the consumer backlash to the announced changes, Netflix still moved forward with its new pricing policy. As might have been expected, many Netflix customers became former Netflix customers (or chose to subscribe to only one of the two offerings). I can understand that Netflix is looking for new ways to generate income as competition heats up in the always competitive market for home entertainment dollars. However, you would have thought that they would have done their homework a little more diligently in assessing the likely marketplace reaction (and the resulting loss of customers and drop in stock price) before enacting the new pricing plan. It kind of reminds me of Coca-Cola’s decision to dump the old formula for New Coke without gauging how Coke drinkers would react, only to have to backtrack later.

On the heels of that pricing controversy

Netflix then decided to partner with Facebook to show its customers’ viewing histories on Facebook, presumably to data mine the value from that demographic and behavioral information. By aggregating the information collected by both on a Facebook user, Facebook and Netflix could paint a pretty accurate picture of a user’s anticipated buying behaviors and otherwise generate a fairly detailed personal profile. This allows Facebook and Netflix (and any third parties with whom they could share that information) to pinpoint marketing to those users. While some may view this ability to be targeted to one’s specific interests and activities as a real convenience, I (and I suspect a lot of other folks) see this as yet another erosion of our personal privacy.

Some history is in order.

The U.S. Senate, after heavy lobbying from Facebook and Netlflix, tinkered with the Video Privacy Protection Act (“VPPA”), a law originally enacted in 1988 after the video rental history of failed U.S. Supreme Court nominee, Robert Bork, was published by the Washington City Paper during his Supreme Court confirmation hearings. The VPPA, as originally enacted, outlawed the disclosure of video rentals unless the consumer gave consent, on a rental-by-rental basis. Previously, the law prohibited Netflix customers from allowing their Facebook streams to automatically update with information about the movies they were viewing, though Spotify and other online music-streaming customers could consent to the automatic publication on Facebook of the songs to which they’re listening. Facebook and Netflix both lobbied Congress hard to amend the VPPA to put it on an even footing with these music services. Late last year, the U.S. House of Representatives passed the Video Privacy Protection Act Amendments Act of 2012 and President Obama signed it into law. As a result, Netflix and Facebook now can automatically update a user’s timeline with a list of whatever they’re watching on Netflix.

So what’s the big deal?

Netflix says that you can “opt out” of this for each movie or show you rent, but how many people are going to remember to do this on a title by title basis or even once? It is bad enough when Facebook keeps eroding our privacy. However, it is a “free” service and allowing Facebook to monetize the data it gathers is part of the price you pay to use it. However, Netflix is a pay service. While the same people who enjoy keeping all of their “friends” up to date as to their current location, activities and meals might enjoy sharing this information with the world, I think that there are plenty of people who will not see it that way and Netflix can expect to receive some less than happy reaction from at least a portion of their subscriber base.