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Verizon reportedly taking on Netflix in online video biz

Verizon plans to stream movies and television shows to customers outside of its landline territory, and it's expected to come next year, according to Reuters.

Verizon, shown here testing out a streaming app for its Fios service, plans on a broader offering of online video outside of its territory.
Marguerite Reardon/CNET

Verizon Communications is ready to get into the online video business.

The telecommunications provider plans to launch an online streaming video service that would take on Netflix, Hulu, and the traditional cable providers, Reuters reported today.

Such a service would mark a break from the company's past adherence to the pay TV model. As of the third quarter, Verizon delivers cable TV, along with Internet and phone service, to 4 million customers under its Fios offering. The new online offering would be rolled out to markets where Fios is unavailable, and will likely use its wireless arm's national reach to promote the service.

A Verizon spokesman declined to comment to CNET on the story.

The service is expected to be narrow, focusing on a package of movies similar to Liberty Media's Starz Play and Viacom's Epix, or on children's programming from Walt Disney Co. or Viacom, Reuters said.

As such, it's unclear how much of a threat the service would be to the likes of Netflix or Hulu, which offer a wider library of content.

The news comes after Verizon Wireless inked a deal with cable providers Comcast, Time Warner Cable, and Bright House Network to cross-sell their service as part of Verizon's $3.6 billion acquisition of cable's spectrum assets.

That deal plus Verizon's streaming video plans suggest that Verizon Wireless stores across the nation could be selling competing services. While Verizon has majority control over Verizon Wireless, it is jointly held with Vodafone.

While Verizon's Fios service works like cable, the company's executives have long been frank about its willingness to address customers who desire service "over the top," or delivered through an Internet connection. Verizon, AT&T, the cable companies, and satellite providers increasingly face competition from online video and streaming services offered by the likes of Netflix.

Amazon, for example, offers a library of streaming video through its Amazon Prime service, and has been eager to push more consumers on to online content through its Kindle Fire tablet. Microsoft is attempting to take control of the online video experience through its Xbox 360 video game console.

The pay TV companies have also been tinkering with online video themselves with TV Everywhere, a service that is expected to provide access to content from any device--as long as the user is a paying subscriber.

Verizon is also attempting to expand the number of viewers for its content to allow it to better bargain for lower programming fees, which all of the pay TV companies have had to deal with, Reuters said.