US movie-streaming giant Netflix is holding talks with internet service providers with a view to setting up shop locally over the next 12 months.
Sources said Netflix had been speaking with potential partners in the hopes of creating alliances in Australia.
In some instances, potential partners were told Netflix hoped to begin operations in the next 12 to 18 months.
The move comes as no surprise, say industry experts, who point to the government's $36 billion National Broadband Network as a key reason for such an investment.
Netflix chief executive Reed Hastings has previously hinted at expanding the service outside North America to include Asia and Europe.
Netflix's US-based spokesman, Steve Swasey, declined to comment on any Australian expansion plans.
"Netflix will launch in Latin America later this year. We have not said anything about other international plans after that," Mr Swasey said.
Netflix will launch in Latin America and the Caribbean later this year.
Netflix's entry will cause ripples among internet television (IPTV) players such as Telstra's T-Box, Foxtel and FetchTV.
It is understood that Netflix is particularly interested in the FetchTV model of partnering with ISPs.
FetchTV counts iiNet, Internode, Westnet, Adam Internet and Optus as partners.
With Internode, for example, customers pay $399 for the FetchTV set-top box and a subscription that starts at $5.95.
Its premium FetchTV package includes 30 movies per month.
Bandwidth-hungry users can rest assured that they will not be penalised on FetchTV, according to Heidi Angove, Internode content acquisition manager.
"The size of shows consumed by Internode-FetchTV customers does not matter as the movies are unmetered," Ms Angove said.
She declined to comment on Netflix's plan, but said: "We're confident that FetchTV will run a good race."
Ms Angove, who has been in the IPTV business since 2004, said momentum was gaining across the industry as people were looking at alternative ways to consume content, especially video.
Traditional DVD rental player Quickflix said it remained committed to its existing model, but conceded that movie streaming was growing.
Quickflix founder and executive chairman Stephen Langsford said while the company was in discussions with "lots of people" on video streaming, its main competition was from physical rental stores, not online.
"DVD retailing and rental today is close to a $2 billion business in Australia (and) streaming is utterly tiny, but it will grow over the course of the next decade," Mr Langsford said.
Quickflix, under new chief executive Chris Taylor, has signed its first distribution deal with Sony Australia to stream movies some time this year on its internet-connected TVs and Vaio computers.
Earlier this month, Quickflix entered a deal to buy the online library and 40,000-strong subscriber base of Telstra's BigPond Movies.
Nine Entertainment recently signed a heads of agreement to form a joint venture with US video-streaming website Hulu.
Nine is keen to develop the joint venture but needs to keep digital partner Microsoft on side. Nine would also have to win over at least one other rival free-to-air broadcaster, with Seven and Ten said to be unconvinced at this stage.
Christophe Bur, who runs the media and entertainment practice at consultancy Capgemini Australia, said video had always been the "anchor tenant" for the NBN and that it was no surprise that players such as Netflix would be interested in the local market.
"It's just a matter of time before they all come in," Mr Bur said.
"The early bird gets the worm, but the second mouse gets the cheese."
ADDITIONAL REPORTING: JAMES CHESSELL
Please hurry up with it , dam so looking forward to this =)