Verizon Eyes Online Movie Distribution

Source: Reuters

Verizon Communications (NYSE: VZ) is offering a broadband video subscription service from Starz Entertainment to expand its video offerings on the Internet, the companies said on Tuesday.

Verizon’s film foray comes as online video on demand is experiencing explosive growth. As more people switch over to high-speed connections throughout the country, online video becomes increasingly popular.

The new Starz Play service, offered at $5.99 per month, or $4 less than what Starz charges for its similar Vongo service, is available to Verizon’s 8.5 million high-speed Internet service customers as well as potential customers outside of its regions.

Internet movie services such as those offered by Vongo, Netflix and Amazon.com (NASDAQ: AMZN) have yet to be big hits with consumers, as most continue to rely on watching long-form movies in front of televisions.

Starz has aimed to court younger consumers and travelers, who spend more time in front of laptops and digital entertainment devices like Apple’s iPod. Starz Play movies downloaded from the service will not be viewable on the iPod.

The Verizon service is Starz’s first wholesale agreement, which the company sees as the future of its Internet subscription movies business.

Starz does not disclose how many customers it currently serves. The company will continue to offer Vongo, which also lets consumers pay to rent newer releases as well as more than 1,000 movies for $9.99 per month.

Recently cable networks such as HBO have expanded their online offerings by partnering with iTunes to distribute content.