Competition for Netflix gets serious as Verizon enters ring

Competition for Netflix gets serious as Verizon enters ring

Summary: Verizon is reportedly planning to launch its own digital streaming service.

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it's turning into an all-out war against the major cable companies as yet another major company is reportedly entering the digital streaming market.

Verizon Communications is planning to roll out its own standalone streaming service with film and television content, according to Reuters, based on reports from "several people briefed on the plan."

Interestingly, Verizon is planning to make this platform available outside of markets where it currently offers its FiOS Internet and TV products when it will be launched next year. FiOS isn't available throughout large swaths of the country, and Reuters adds that this streaming service would be available to approximately 85 million Americans at launch time.

This news also comes on the heels of the announcement last week that Verizon picked up a large number of spectrum licenses from Comcast, Time Warner Cable, and Bright House Networks. One of the proposed theories as to why Verizon made the purchase was to beef up its network for handling more 4G data traffic, but this streaming solution of its own could also be a valid reason.

This is no petty matter or competition for cable companies, which are already seeing many consumers turn away in favor of not only alternative providers like Verizon FiOS, but also settling for the content they can get from set-top boxes, gaming consoles and the like with a few subscriptions here and there to other digital music and movie providers.

Nevertheless, also threatened here are other digital streaming platforms like Hulu, but more so, Netflix. Earlier this year, it seemed like no one could catch up with the by-mail/streaming subscription service. Then after some major bumps in the road (price hikes, the Qwikster announcement and retraction, scrambling to score deals with studios, selling off bonds, etc.), that future is incredibly uncertain going into 2012.

While it might take awhile to build up the content library (although that could be sizable at the start as Reuters cited potential deals with both Disney and Starz), Verizon might provide one of the most serious threats to Netflix yet if it can produce nearly the same amount or more digital programming than Netflix at better prices. Perhaps Verizon can even get away with the same prices just based on how upset consumers already are at Netflix.

We won't know for certain until Verizon confirms these reports and introduces its new platform in detail, but it could have the potential to completely turn this market upside down in the next year.

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Topics: Verizon, Banking, Enterprise Software, Hardware, Mobility

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23 comments
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  • Verizon will likely charge more for their service

    What remains to be seen is if Verizon will also charge you more for the extra bandwidth their offereing will use on their own network.
    Tim Cook
    • RE: Competition for Netflix gets serious as Verizon enters ring

      @Mister Spock
      And also if we'll still be shafted with commercials. I specifically use NetFlix because there are no stupid commercials. HuluPlus and others have them so I pass.
      audidiablo
  • Netflix Loses Again

    I'm personally glad another company putting the screws to Netflix. I loved Netflix during their hay years, but then greed reversed the love affair. I had two subscriptions, one for mom and one for our family. After Netflix doubled their prices, I cancelled my subscription and just kept mom's. Heck, she didn't have internet and I piggybacked off hers and paid less in fees/taxes. For my DVD's, I started a Blockbuster subscription. Redbox is just down the street too. When a decent streamline comes available, I'm dropping Netflix all together. I really don't care I may actually have to pay more. I'm passionately hating Netflix now. You screw me and I will eventually get back in my own way and that's dropping the greedy lurches when the time is right. C'est la vie!
    boameister@...
    • Netflix management is Netflix's worst enemy

      @boameister@... They are even worse than HP's senior leaders...
      otaddy
    • RE: Competition for Netflix gets serious as Verizon enters ring

      @boameister@...
      compared to blockbuster's lunch greed, netflix's is like a baby's first solid meal. the reason for the demise of sun microsystem is the same reason for netflix debacle, i.e. investor's greed. can we blame these investors? i guess not, they are all in for the money. they expect to get a hefty return for their investment considering the losses incurred to their finances due to economic downturn that is almost a decade old now. netflix management could have said no to some of these zealot inverstors, but they are afraid to lose their investment. so they cave in, and we saw the result. sun could have weathered the storm, but the investors couldn't wait for the uncertainties, so they decided to do what they believe is the best for their interest. which is good, i guess!!! and as for me, i still have netflix. i feel better with them than with blockbuster...
      kc63092@...
    • RE: Competition for Netflix gets serious as Verizon enters ring

      @boameister@...
      I agree that as soon as a company that will offer streaming to your TV as easy as Netflix that I will be switching. But what I think was the beginning of the end was Netflix losing the shows they used to have with their contract with Stars when they lost that my love of Netflix was diminished.
      nickitnite
      • RE: Competition for Netflix gets serious as Verizon enters ring

        @nickitnite
        I really don't think that is quite so important as they could possibly get resigned. The one major benefit in my opinion of Netflix over others is that you don't suffer from stupid crap commercials. I agree they shouldn't have made such an arrogant drastic move but they pulled back and apologized. Sometimes we need to make mistakes in order to learn... This was the first. Understand there will be many that may go elsewhere but they will get to enjoy commercials and advertisements all over all the time. I will stick with who doesn't abuse you with that crap. I would rather pay double and use my time the way I want then losing precious moments of my life that I can never get back watching stupid commercials or staring at ads which is why I don't pay for cable but instead cable internet and Netflix together on my Xbox which just got a whole lot more options. Verizon is overpriced crap so I could care less what they offer unless it is a solid rate with no contract at a reasonable price and no stupid commercials. I hate adverts with a passion.
        audidiablo
      • RE: Competition for Netflix gets serious as Verizon enters ring

        @nickitnite the Stars content is not lost until February 2012 on Netflix so how can you have lost something already?
        eye4bear
  • RE: Competition for Netflix gets serious as Verizon enters ring

    The main problem with Verizon is the fact the never go into anything full throttle. For example, their FIOS infrastructure is fantastic (I am a subscriber). But they've stopped expanding to new areas. Here is another: Optimum TV (Cablevision is Verizon's competitor in the NY metro area) allows their subscribers to view TV channels on their iPad. Verizon has had a similar app "in the works" forever and a day. Here is a third one: The cable networks make it easy for subscribers to get WiFi access pretty much anywhere in the NY metro area, using pretty much any device. Verizon has fewer hotspots that can only be accessed using Windows machines, not tablets or phones. How lame. They just aren't really forward-thinking enough.

    If I had to bet, I'm would say that their streaming service, if ever introduced, will crash and burn in less than a year. Simply because they will not have enough content to compete with Netflix at a reasonable price. Their tentative steps will be laughed-off the streaming market.
    krishpn@...
    • RE: Competition for Netflix gets serious as Verizon enters ring

      @krishpn@...
      My friend works for Verizon and told me that Verizon will not expand into a new market unless they know - without fail - they can get 33%+ of the customers to switch. The problem is that they then are so afraid on not meeting the 1/3 conversion goal that they have entered into almost a full paralysis.

      Makes you wonder what their goals would be for streaming (must have 1/3 of Netflix's 30 Million customers or we will quit?)
      lambtron__40
      • RE: Competition for Netflix gets serious as Verizon enters ring

        @lambtron__40

        I have FiOS available, [i]if I wanted it[/i], but, I do not like Verizon's prices. Sure, they have the 3 or 6 month incentive price, but, many of their offers have a 2 year agreement tied to them.

        At least with my current cable outfit, I can always drop them any time I want, with no [b]early termination penalty[/b].

        Lately, in this market, Verizon has been offering a "triple play bundle" [b]plus Verizon wireless[/b] for a low price. but look closely at the fine print!
        fatman65536
  • RE: Competition for Netflix gets serious as Verizon enters ring

    Being Verizon, and a telecom, you can count on one thing.,, t wont be cheap,,, except maybe for an introductory price of $15 - $20 / mo for the first 6 mo - 1 yr. Then the price will skyrocket to at least $45 - $50 per month, with bandwidth restrictions...
    The Reverend
    • RE: Competition for Netflix gets serious as Verizon enters ring

      @The Reverend
      amen...
      kc63092@...
    • RE: Competition for Netflix gets serious as Verizon enters ring

      @The Reverend
      +1 totally agree... One other thing though they will probably do a 6 month for $15 a month then lock you in a 2 year contract deal where the remainder will be $40... They love to sign you in on something they can lock you in with. This is why I look for anything that doesn't have a contract so I can leave whenever I need to or would like to even if it costs a bit more in the beginning you will probably end up paying less in the end. All stupid marketing tactics which is why I hate advertisements as they are all BS and wasting your time and your life where you could be doing something else productive.
      audidiablo
  • RE: Competition for Netflix gets serious as Verizon enters ring

    I have my doubts about how well Verizon will compete with Netflix. I think this article over-dramatizes the "threat." Fragmentation of the content market is the real problem for any existing or proposed streaming service. Not even Steve Jobs had enough clout to untie that Gordian Knot. It's doubtful Verizon will do any better. On the other hand, Netflix could do with some real competition. They may never recapture the brand equity they carelessly pissed away with the sharp price hikes and that boneheaded service separation scheme. But another me-too service will still have a hard time establishing itself unless they can find a way to add significant value to their product beyond what Netflix offers.

    My hope is that at some point the competition will force Netflix to look for a way to add value to their service. For instance, offering a discount for people who subscribe to both their mail and streaming services. But I'm not holding my breath.
    thewhitedog
    • RE: Competition for Netflix gets serious as Verizon enters ring

      @thewhitedog
      back to square one ... with nearly a million less of pissed off customers. a very good business plan indeed!!!
      kc63092@...
  • RE: Competition for Netflix gets serious as Verizon enters ring

    Verizon is trying to knock its competition such as Comcast, AT&T, BrightHouse, Cox, Charter, Etc by offering this plan in non markets. Verizon may release their whole catalog which is probably many times larger than Netflix. I bet you Verizon home markets may pay around $10 a month extra with no bandwidth cap. While non market customer will pay double that around $20 a month with a bandwidth cap. It causes people to "cut cords" from those companies driving competing companies subs down. So when Verizon launches Fios in enemy markets they can poach these customer sign them up merge those additional subs to a higher paying plan. By that time Netflix will be dead or bought out by competing company. That company will have to lure all of those customers which Netflix lost back. Which may not happen because Verizon may just drop the price to current Netflix levels of $7.99 a month while the competing company that bought Netflix try to recoup the money they invested buying it. No conspiracy just a possible strategy by Verizon. It has a upside of dominating the whole country.
    1g2j
    • RE: Competition for Netflix gets serious as Verizon enters ring

      @1g2j
      One advantage of Netflix is that you don't suffer having to watch commercials. No Ads either where all the other cable companies take a 30 minute segment and use about 10 minutes just in commercials. Do the math... Say you watch on average 2 hours of TV a day everyday of the year... That is 14,560 minutes or 242.66 hours or 10.11 days a year you lose of your life that you'll never get back wasted on commercials and ads. Cable wasn't supposed to keep commercials but they did because of greed. Now look you cannot do anything without getting a bunch of irritating advertisements everywhere. Google is only making matters worse and raking in billions. This is why I don't use Google because I don't promote obnoxious adverts.
      audidiablo
    • RE: Competition for Netflix gets serious as Verizon enters ring

      @1g2j

      I didn't know that you were a 'fly on the wall' during a Verizon "screw the customer" sales strategy meeting!!

      WRT FiOS, it has been reported that Verizon is not going to expand any further that what is already in the works. It looks like they and the other telcos have 'milked' the Telecom Act of 1996 for all of the subsidy money they could get away with.
      fatman65536
  • RE: Competition for Netflix gets serious as Verizon enters ring

    Netflix doesn't value their customers. I tried to stay with them, but then when I rented a dvd in one month and returned it the next ( 2 weeks later) they essentially charged me for two months. Glad to see them hurting. The greedy so and so's
    D_Flahive2000@...