US telco Verizon Communications plans to launch a standalone service allowing customers to stream movies and television shows over the Web, in competition with OTT players such as Netflix and the traditional cable TV business, Reuters reports, citing several people briefed on the plan.

Verizon is talking with prospective programming partners about the service, which would be introduced outside of markets where it currently offers its FiOS, broadband and TV package. This would cover some 85 million households.

Even though programming for such a service is likely to be limited, any such initiative is likely to add further to the concerns of cable and satellite operators that customers will drop their pay-TV subscriptions in favour of cheaper online alternatives – so called ‘cord-cutting’.

By launching an online OTT service, Verizon would to be able to grow its customer base and thereby lower its programming costs on a per subscriber basis.

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