According to Jeffries, Verizon Communications Inc.'s (NYSE: VZ) standalone video streaming service, which is expected to launch in 2012, could be another potential competitor for Netflix Inc. (NASDAQ: NFLX).

Verizon plans to launch standalone streaming services in 2012, according to a recent Reuters article. The company intends to make the service available beyond Fiber Optic Services (FiOS) markets, allowing customers to stream movies and TV shows over the Web. Verizon is reportedly in discussions with content companies.

These discussions could be tricky since TV networks/content producers don't like to upset their lucrative carriage deals with cable multi-system operators (MSO) but this could be another compelling over-the-top option. The article notes a Verizon offering could be more limited in scope versus a more traditional cable package, said Youssef Squali, an analyst at Jefferies.

The article noted that Verizon is most likely to price such a service competitively with Netflix, so Squali can add another potential entrant to the list.

Competition from TV Everywhere (notably Time Warner's (NYSE: TWX) HBO Go offering), Amazon's (NASDAQ: AMZN) Prime and LOVEFiLM offerings, Dish Network's (NASDAQ: DISH) Blockbuster Movie Pass, Hulu, not to mention Google Inc. (NASDAQ: GOOG) and Apple Inc. (NASDAQ: AAPL) is expected to get worse before it gets better.

Squali said a less favorable competitive environment is a key concern, hence reiterating his hold rating on shares of Netflix.

Squali expects increased competition to add further pressure to already rising content costs (his estimate of $2.0 billion in fiscal 2012) as well as subscriber acquisition costs (SAC), given the wider array of streaming options available to the consumer.

Squali further noted that another competitor in the U.S. could weaken Netflix' cash cow domestic business, which is currently being used to fund international expansion plans.

Netflix' CEO, Reed Hastings, presented at an investor conference yesterday, with the following key takeaways: the streaming business continues to grow at a healthy pace, HBO GO is now viewed as strongest competitor with both Netflix and HBO spending $1 billion to $2 billion/year on content, and management was too fast in embracing streaming while dismissing DVDs too quickly (though focus is still on global streaming opportunity).

The key takeaways also include: Hastings believes Netflix was probably adequately capitalized but $400 million capital raise provides cash upfront and avoids crisis of confidence, original content could be 5/10/15 percent of content spend over time, doesn't feel too exposed to Microsoft Corp.'s (NASDAQ: MSFT) XBox in the living room, given growth of smart TVs and the Netflix button on the remote control, and longer term (10 years) would like to move to global content licenses.

Netflix stock closed Tuesday's regular trading down 2.82 percent at $68.14 on the NASDAQ Stock Market, while shares of Verizon closed up 0.71 percent at $38.32 on the NYSE.