Verizon: The latest threat to Netflix?

Netflix CEO Reed Hastings may have more streaming competition on his hands now that Verizon announced a similar venture. — (Image credit: Getty Images Latam)

The battle for online eyes is about to intensify. Verizon Communications is planning to challenge CEO Reed Hastings' Netflix head-on with a standalone service allowing customers to stream movies and television shows onto their computers, according to a report from Reuters. The phone company is seeking prospective partnerships for the service, which could debut as soon as 2012 and would be available outside of its current FiOS cable markets. Should Netflix, coming off of a rocky year, be concerned?

Undoubtedly, yes: "Fresh competition would be bad news for Netflix," says Todd Wasserman at Mashable, which has seen a "reversal of its fortunes" since it announced a controversial price raise in July. Verizon's proposed service, with a potential market of 85 million households, would be priced competitively with Netflix and give Verizon a far greater reach than the 5 million FiOS subscribers it currently has.

The Week

Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.

SUBSCRIBE & SAVE

https://cdn.mos.cms.futurecdn.net/flexiimages/jacafc5zvs1692883516.jpg

Sign up for The Week's Free Newsletters

Join more than 350,000 subscribers and keep yourself informed with a selection of The Week’s most interesting, enlightening and entertaining stories - plus daily puzzles.

Latest Videos FromThe Week

Watch full video here:

Is anyone really surprised?: Well, "we're not entirely shocked by the move," says Terrence O'Brien at Engadget. Even though "details are scant" and "there's no telling when [the new service] might launch," you can be sure all of Verizon's competitors "will be watching closely…and we don't just mean Netflix." Cable and satellite providers like Time Warner are "already wary of the public embracing cord-cutting." When a fellow cable provider like Verizon is "encouraging the behavior," it definitely "sets off a lot of alarms."

Verizon or even Amazon? Please: "We fear HBO Go the most," Hastings tells The Street, dismissing the Verizon threat. HBO Go allows subscribers of the premium television network — which airs hits like Boardwalk Empire and a wealth of films — to access its content through their computers and mobile devices. Though HBO isn't competing with Netflix directly yet, "they can" if they want to. "HBO is becoming more like Netflix," he says, "and we are becoming like HBO."