Netflix’s week goes from bad to worse

Netflix chief Reed Hastings began the week admitting "arrogance" in a lengthy apology to subscribers, only to have his damage-control efforts blow up in his face by confusingly splitting up the company's streaming and DVD businesses.

But on Thursday, Hastings' fortunes--at least PR-wise--seemed like they were about to change. He was introduced onstage by Facebook chief Mark Zuckerberg at the social network's annual developers conference with some big news: a partnership with Facebook that will allow users to watch movies or TV shows with their friends, one of several new social apps Zuckerberg highlighted during his keynote.

However, Hastings quickly pointed out that a privacy law is currently preventing Netflix and Facebook from launching the app in the United States.

Congressional lawmakers are now reviewing the law--the Video Privacy Protection Act of 1988--as a prelude to eventually overturning it, Hastings said.

"Unfortunately, we will not be offering this feature in the U.S. because a 1980's law creates some confusion over our ability to let U.S. members automatically share the television shows and movies they watch with their friends on Facebook," Michael Drobac, director of government relations at Netflix, explained in a post. Drobac noted that "some forward-thinking members of Congress"--including Reps. John Conyers, Henry Waxman and Darrell Issa--have introduced legislation--H.R. 2471--that would overturn the 1988 law.

Until then, though, Facebook users in 44 other countries will soon be able to watch, say, "Blue Crush 2," or another one of its 20,000 titles together--but not here.

Meanwhile, Hastings' brutal week is about to go from bad to worse.

According to All Things D's Peter Kafka, the Dish Network is holding a press conference at 1:00 p.m. ET on Friday "and the odds are very, very, very good the satellite TV company will use it to introduce a Netflix-style streaming service of its own."

As Kafka points out, the company's invitations for today's event boast the unveiling of a "stream come true." That's the innovation that everyone, even Hastings, thought Dish would eventually do with Blockbuster, which it acquired for $320 million in April.

"The good news, if there is any, for Hastings and Netflix is that [the launch] isn't creeping up on anyone," Kafka wrote. "So that should (theoretically) cushion any blow."

Still, from Netflix's perspective, the Dish-Blockbuster announcement couldn't have come at a worse time.