Netflix, Inc.(NASDAQ:NFLX) is getting more competition by the day.
First it was Amazon and now it is Verizon Communications, which has tied up with Coinstar Inc. to provide video streaming services, called Redbox Instant Service.
A report by GigaOm that the new service will undercut Netflix's offering results in the share of the company falling about 7 percent to $76 at close, registering its biggest decline in a month.
According to GigaOM Verizon’s and Coinstar’s Redbox Instant service could charge subscribers $6 a month for a basic streaming plan. Compare that with the $7.99 a month charged by Netflix. Online retailer Amazon offers free two-day shipping and access to 30,000 movies and TV shows for $79 a year.
In fact Redbox Instant, in which Verizon has a stake of 65 percent will compete with both Netflix and Amazon in the video streaming segment, where people watch movies and televisions shows online and on mobile devices such as the Apple's iPhone.
The U.S. market for subscription streaming rose fivefold to $1.1 billion in the first half of 2012 from a year earlier, according to data from the Hollywood studio-backed Digital Entertainment Group.
Netflix had 29.4 million streaming customers globally as of Sept. 30.
Redbox Instant will offer a la carte movie rentals online and purchases for download, Eric Bruno, Verizon’s senior vice president of consumer product management, said in an interview in September. Services will start by the end of the December, this year.