Telecommunications giant Verizon is reportedly working on a Web streaming service akin to Netflix, according to a report from Reuters. The new service could be available to as many as 85 million U.S. households beginning next year, sources said.
At first glance, a company with the size and clout of Verizon would appear to be a formidable potential challenger to Netflix, who has been especially vulnerable lately. Still, there are reasons to doubt that Verizon would be successful in making a dent in Netflix’s dominance of this space.
Verizon already has relationships with content providers via its FiOS pay TV service and the Web-based component of that, and at launch could potentially reach more than triple the number of subscribers that Netflix currently has. Considering Netflix’s recent rate hike, aborted DVD spin-off plans, customer losses and stock price drop, the streaming company is at a particularly vulnerable stage of its history.
Verizon’s Initial Limitations
Yet there are a few caveats reportedly coming with Verizon’s new offering. For one, it’s not going to be available anywhere that Verizon offers FiOS service. Geographically, that’s a huge portion of the U.S., but many major U.S. cities, especially along the East Coast, have access to FiOS and thus won’t have the option to sign up for the new service.
It’s also apparently going to have a limited selection of content at first, with only a handful of content providers signing on. After all, Verizon wants wants to move further into the online video space, but is not exactly eager to disrupt the pay TV industry.
As rocky as things have been for Netflix’s brand in the last few months, the company still has the benefit of being a relatively young Internet company without the baggage and reputation of a bloated telecom. There is, at least to a small yet growing extent, some philosophical resistance to the idea of signing up with such companies for anything more than an Internet connection. In all likelihood, Verizon’s streaming service would be aggressively bundled with its other products.
Still, for existing Verizon customers (and there are more than a handful), a competitively-priced streaming service could be attractive enough to add to that monthly bill.
What do you think? Would you sign up for a Netflix competitor from Verizon?
