Verizon and Coinstar Redbox are partnering to enter the same space that Netflix created. They will be competing, head-to-head with Netflix. This is the first step toward capturing this segment of the marketplace.
Verizon already operates an IPTV service called FiOS so this is just a matter of delivering content over their existing network. It makes perfect sense for them.
They will be offering this service outside their traditional network as well.
If we take a look at the past performance of Verizon, if I were Netflix, I would be worried.
In the 1990′s companies like CompuServe, Prodigy and America Online ruled the Internet access space. That was in the days when we dialed in over local phone lines.
Then the baby bells and cable television companies jumped in and won most of the business. That sunk companies like CompuServe and Prodigy and AOL is struggling. All that while the baby bells and cable television companies serve most Internet access customers over their DSL and high speed internet lines.
The baby bells have been successful at this model.
The same thing may be getting ready to happen here in this television space.
Netflix started this segment and has been successful. Roughly one third of the traffic on the Internet is Netflix traffic. That is incredible.
That is an opportunity for companies like Verizon, AT&T and CenturyLink as well as other local phone companies.
Unless Verizon blows it with marketing or messaging I think they can be successful in this space. After Verizon I expect to see others like AT&T and CenturyLink jump in as well.
These are all direct competitors to Netflix in this television space. Netflix now has a target painted on their back.
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Please attribute to Jeff Kagan, Tech Analyst with www.jeffKAGAN.com
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Jeff KAGAN| Tech Analyst www.jeffKAGAN.com
Analyst sharing perspective on the changing industry for 25 years
~ Also Columnist, Author, Consultant, Speaker
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Contact InformationJeff Kagan
Title: Tech Analyst ~ Industry Analyst ~ Wireless Analyst ~ Telecom Industry Analyst
Jeff Kagan Tech Analyst, Columnist and Author
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Phone: 770 579 5810