DirecTV considering Netflix-like online service

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Add DirecTV to the growing list of companies considering challenging Netflix.

The El Segundo-based satellite TV company, which has about 20 million subscribers, has sent a survey to customers in which it indicates it is considering debuting an online service that, like Netflix, would offer television shows and movies on-demand for a flat monthly fee.

According to the digital media blog Zatz Not Funny, the survey said:

[W]e would like you to evaluate a new service that DIRECTV is thinking about offering to their customers. DIRECTV plans to offer a streaming-only Netflix-like service for a flat fee per month, which would appear as a line item on your monthly bill. The service would allow you to stream thousands of movies and television shows over a broadband internet connection to your television, computer or tablet ... You could watch as many programs as you want for one flat monthly fee, similar to what Netflix streaming offers.

According to the survey, the movies offered would be at least five years old. TV shows offered would include old series as well as previous seasons for current programs. A DirecTV spokesman said the company, the second largest television provider after Comcast, was ‘taking the temperature of the marketplace’ with the survey and may not launch the service.

Nonetheless, it demonstrates that the success of Netflix, which now has 22.8 million subscribers in the U.S. and another 800,000 in Canada, has practically every television and digital video company scrambling to catch up.

As reported by The Times last week, a number of other companies are in talks to start offering a Netflix-like online movie and television subscription service. Chief among them is DirecTV’s primary competitor in satellite television, Dish Network, which is considering using the brand name and infrastructure of Blockbuster Inc., which it recently acquired out of bankruptcy for $320 million. Other potential Netflix competitors include Wal-Mart, Best Buy, Amazon.com and Hulu.

Buying the Internet streaming rights to a large collection of movies and television shows could cost DirecTV hundreds of millions of dollars. But if it can recoup that money with an extra fee to subscribers and prevent them from engaging in the satellite equivalent of ‘cord-cutting,’ it could be well worth the cost.

-- Ben Fritz

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