Is This the Threat That Netflix Didn't See Coming?

There's an unlikely company making a play for digital video in the U.K. these days.

PaidContent.org writes that Domino's Pizza (NYSE: DPZ  ) -- yes, that Domino's Pizza -- is starting to offer pie buyers vouchers that can be redeemed for digital movies.

In a Tuesday press release, the global pizza chain introduces what it calls Domino's Pizza Box Office, which teams up with Lionsgate (NYSE: LGF  ) to offer new and catalog titles that can be streamed for 48 hours after the vouchers are redeemed.

There's no free lunch here. The selections are limited, and they're not being given away. Hungry and entertainment-starved customers pay roughly $5.60 for new releases or $4 for older titles. There may very well be combo deals offered that create better values, but it remains to be seen if this is going to be much of a threat to BSkyB, Netflix (Nasdaq: NFLX  ) , and Amazon.com's (Nasdaq: AMZN  ) LOVEFiLM that are already serving up streams in the country.

The movies can also only be streamed on PCs or mobile gadgetry including tablets and smartphones.

However, let's not write off Domino's Pizza Box Office entirely.

Online ordering reportedly makes up 58% of Domino's U.K. orders, so we're apparently targeting a large enough group that's already armed with the tools to watch these streams.

There's also the menu layout. There's a prominent tab that reads "Movies" alongside the Pizza, Sides, Drinks, and Desserts buttons. In short, it's going to engage plenty of customers who are already comfortable with e-commerce transactions through Domino's.

We'll see if Domino's introduces a similar service closer to home. It would seem to be a hard sell with more than 100 million homes still paying for cable or satellite television programming that includes access to pay-per-view video.

However, you never know where a competitive threat will come from. The Domino's offering appears misguided and mispriced, but it wouldn't be adding a "Movies" tab to its menu if it wasn't willing to see it through what will likely be rough early days.

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Longtime Fool contributor Rick Aristotle Munarriz owns shares of Netflix. The Motley Fool owns shares of Amazon.com and Netflix. Motley Fool newsletter services recommend Amazon.com and Netflix. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


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