Rumor: Verizon targeting Netflix with nationwide online movie service

Verizon Communications (NYSE: VZ) is planning to launch a nationwide online video similar to Netflix (Nasdaq: NFLX) service.

The service, according to Reuters, will be available online to consumers outside of the telco's FiOS footprint, meaning it would become available to some 85 million U.S. households.

Sources told Reuters that Verizon, which has 5 million FiOS TV subscribers, is in talks with content partners and likely would offer a limited amount of programming. The initial offering would most likely be a movie package similar to Starz, or children's programming -- with a rollout slated for 2012.

Sources told the news service that talks have been ongoing for two years and have been focusing not just on fees, but on the concern that programmers have about disrupting the relationship they already have with other pay-TV operators, especially as Verizon is looking to go nationwide.

Last May, Verizon offered a briefing on Flex View, a cross-platform video on demand service currently available to subscribers of FiOS TV. The unspoken word was that the telco was weighing whether it should expand the service to non-subscribers, as well, on a nationwide basis, entering what already is a crowded field.

At the time, Verizon was being rumored to plan to offer it across an array of over-the-top delivery devices, like Roku, putting it in head-to-head competition with services like Netflix, Apple (Nasdaq: AAPL)'s iTunes and Amazon (Nasdaq: AMZN) Prime.

For more:
- see this Reuters article

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