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Breaking News: Verizon takes on Netflix with new web service

Radford C. Dec 7, 2011 0

Verizon MonitorThis looks to not be a rumor considering that several people were briefed in the plan.  The mobile carrier and maker of FiOS cable expects the new service to rollout in 2012 and they have already begun talking to several content providers. Once the programming deals are done, Verizon is expected to provide the service to 5 million FiOS customers as the first step.

Potential suitors include  Liberty Media’s Starz Play, Viacom’s Epix, Walt Disney, etc. It goes without saying that there are some haters out there (analysts) who are still skeptical of such a move if Verizon does go head-to-head with Netflix.

“If this deal comes true it’s not clear to me what Verizon would bring to the table that is materially different to what others like Amazon offer,” said Carlos Kirjner, analyst at Bernstein Research. Kirjner said Verizon would struggle to negotiate favorable terms to be competitive with Netflix.

And this was all after the $3.6 billion Verizon paid for valuable spectrum from the cable companies. Verizon would want to price any such service competitively with Netflix, whose subscriber count has swelled to some 23 million.

On a side note:

Netflix CEO Reed Hastings, speaking about rivals at a UBS Media and Technology investment conference on Tuesday, said “the competitor we fear most is HBO Go,” a streaming service for subscribers of the pay TV channel owned by Time Warner Inc.

“HBO and Netflix both spend between $1 billion and $2 billion a year on content. If you want to compete with HBO and Netflix, you better commit to multiple-year spending between one and two billion,” Hastings said.

Via »Source