Facebook's foray into the pay-per-view market won't be a threat to the market leader, Netflix -- at least int he short term.

We believe that on a short term basis, [Facebook movie streaming] is not an immediate threat to Netflix as Facebook's is currently only a pay-per-view platform which is more of a threat to other forms of VOD (such as iTunes or Amazon), said Goldman Sachs analyst Ingrid Chung in a note today. She says Facebook's lack of film content and inability to stream films on other devices makes its chances at topping Netflix relatively slim at this point.

That advantage, however, would not last forever. Chung notes that in the long run, Facebook could serve as a credible threat to Netflix. She first cites Facebook's immense user base, which at 500 million users, is twenty five times larger than Netflix's user base of 20 million. The advantage there is clear.

But Facebook's edge over Netflix lies in more than the size it its user base, she said. With its emphasis on social connections, the service offers a far more effective system for friends to share film recommendations than what Netflix has to offer. We believe that the 'wisdom of friends' could be a bigger driver of movie viewership than the 'wisdom of crowds,' Chung said.

So far, however, Facebook's announcement has not impacted Goldman Sach's estimates or ratings for Netflix, but Chung predicted that Netflix shares would take a hit on the news. They did, as Netflix dropped nearly 5 percent Tuesday following the announcement.

So far, the only film available via the Facebook streaming service is 2008's 'The Dark Knight'. Warner Brothers said today that only selected films would be made available for rental or purchase, but did not announce which other films would be offered on the service.

Facebook Gold Goldman sachs ITunes