Intel and Cable TV - It was Just a Dream

By Tony Rizzo January 02, 2013

There's been a lot of noise over the last week that Intel is about to get into the cable industry game in a big way. Yes, there is hardware involved, but the most interesting thing about the supposed move by Intel is that the company will launch an effort to deliver a true "pay only for what you want and get a bunch of free stuff as well" model.

There isn't anything particularly secret going on here. Intel announced back in 2011 that it was forming (and did form) a media group dubbed Intel Media - initially, we believed, to work with other companies such as Google toward launching Intel chip-driven TV content products. Intel Media has stayed under the radar, though in March 2012 Intel also announced that it would work on its own TV content delivery service - which most of us duly noted but which we also more or less dismissed as unreal.

But as the start of the Consumer Electronics Show (CES) 2013 that will begin this coming Sunday approaches, the rumors have become more tangible that Intel will indeed have a wireless Internet TV box and some less than nebulous Intel Media TV service and content plans to show off next week. In fact, the hardware itself may look like what’s shown below.

What is Intel up to here? Is the plan for Intel Media to become a bona fide content delivery company, and one that can deliver a different and new source of revenue for Intel? Or is Intel merely hoping that it can develop a "show and tell" system that its partners can use as a reference model to deliver their own? Regarding the latter thought, as an example we can point to Google, which has failed to deliver any viable TV-related product, especially anything utilizing Intel's chips. Is Intel hoping to somehow inspire Google to get on the right track?

We suspect Intel is thinking more along the lines of the former than the latter. The company has long been thinking outside of the well-known Intel box about different ways to generate new income, and with Apple and Samsung both continuing to "massively" demonstrate that top notch consumer software services lead to both extraordinary hardware purchases and tantalizing hardware/software revenue streams, sees the handwriting on the walls. Further, with the likes of Microsoft now beginning to finally get on the "build our own" hardware bandwagon, Intel is seeing further evidence emerge that it needs to do the same.

What is particularly attractive to Intel about the TV industry is that no one of consequence here - Google, Apple or Microsoft - is truly in the game yet. Google's recent TV missteps suggest to Intel that it can get into the game early enough to become its star player. The one true roadblock for Intel - at least that is what we believe Intel thinks - would be Apple. We've noted elsewhere that we believe Apple will make the move to TV, but that it likely won't do so until early in 2014 (or else rushed out the door very late in 2013 - in time for the 2013 holiday season in November).

For Intel this means that launching a real service in 2013 becomes essential to playing the role of first mover. Getting the wireless TV box hardware out the door should be completely doable for Intel - but getting the hardware out the door is the easy part.

Special Intel TV Content?

The almost impossible piece of it is for Intel Media is to also deliver the actual consumer TV services and content that it will need to excite consumers with. It will be an extraordinarily difficult task to pull off for a number of reasons.

First, as much as consumers want to go all mobile, for the most part they are generally satisfied with the services provided by the cable companies. From a content perspective, most consumers are also perfectly happy with the "packages of stations" they purchase monthly from their cable companies and with the special events they can also purchase as their interests and desires dictate. There is no lack of content to meet demand, and for the most part station bundling provides enough economies of scale to keep costs reasonable.

Second, the cable companies and the content developers they have long worked with (all of whom Intel would have to figure out ways to work with as well) all know that for the most part consumers are fine with the packaged services being provided to them. Is there a way Intel can differentiate its service offerings from what both consumers and their cable companies currently see as working well? A something Intel can offer that would be of compelling and significant interest to consumers, and financially viable to Intel?

The rumor mill has latched on to the notion of Intel selling a service that allows users to buy content and station access a la cart - much as one can now buy songs a la cart. Users would be able to purchase as much or as little station access as they want or require, and would be able to receive that content wirelessly not only on their TVs, but on their smartphones and tablets as well.

Behind the scenes such a service would also be able to provide endlessly available access to any content that has already initially aired (even if it finished airing a single second prior to a user wanting access). Such a feature would eliminate the need for a DVR - though another way to look at it would be Intel providing a virtual DVR that records everything endlessly and is always ready to display anything a user has subscribed to once any agreed to time limits (such as an initial airing) expire.

It almost sounds good on paper, but the enormity of the content assembling task - which would require Intel to strike agreements with enough entertainment companies, TV stations, content development companies, and a variety of existing cable companies - some of which both own the cable and the entertainment ends of things - strikes us as being well beyond Intel's own abilities to pull off. In fact it is something that will prove extremely difficult for Apple to pull off, and we're not sure Apple can make it happen.

As we also noted in the Apple story we referenced earlier, we don't believe that Apple thinks a set top box of some sort is the answer to what consumers want. They also want the cool, new TV itself to go with new services, and this is not something Intel can deliver on. Ever.

Where does that leave Intel?

We can make some educated guesses, but we confess we are not privy to advance notice of anything Intel might reveal at CES next week. Any hardware announcements are almost irrelevant (it would be interesting to see an Intel box tied to a very cool new TV, perhaps something form LG or Sony) - it's the content deals we need to know about. We anticipate Intel suggesting lots of content deals are in the works - and if a recent Wall Street Journal story is accurate, Intel may actually have at least one content provider signed up that it may reveal next week. But that would leave about 300 more deals to sign and make real.

We'll revisit the entire affair next week. Today, however, we are much more in tune with what R.E.M. might have to say to Intel about it:

But that was just a dream

That was just a dream

Edited by Brooke Neuman

TechZone360 Senior Editor

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