Intel's OnCue Internet streaming TV service has been delayed to 2014, so you won't be able to buy it for a holiday present. The delay is being attributed to Intel needing more time to get partnerships with content holding companies such as Amazon. Hasn't anyone at the chip monolith figured out they should just suck it up and go buy someone, rather than try to build a service and market share from scratch?
If OnCue ever arrives, it will be a mix of hardware and services sold directly to consumers. The set-top box – and aren't set-top boxes passé? – will have a camera to do face recognition, so it can figure out what "profile" to offer viewers. Services will include live TV, on demand, and other services.
It isn't hard to figure out why Intel wants to sell services: monthly recurring revenue. But offering an over-the-top (OTT) service puts them into competition with the cable industry, the phone companies, and the satellite industry. While there's not a lot of history between Intel and the satellite companies, cable and telco set top boxes for IPTV use Intel chips.
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Now, if I were a set-top box manufacturer, I'd be re-examining my relationship with Intel right about now to give my cable and telco customers options. With ARM offering lower power consumption and 64-bits in the pipeline, Intel didn't do itself any favors here.
Further, if you are trying to launch a coup against your own customers with OTT, you shouldn't blow your delivery times. It offers little assurance to potential customers and media critics like myself are going to tear you up if you offer anything else than a stellar experience.
Intel should have learned from the mistakes of the TV industry trying to create its own walled gardens around TV sets and Apple's continued slow march to deliver a "killer app" TV experience. Instead, there seems to be a lot of group-think, a "we can do it better" mentality that doesn't bode well whenever it arrives.
Another "what the—" moment comes from the New York Times, saying Intel is looking for a partner to provide funding and distribution to get its set-top box to market. It's dealing with Amazon, but Amazon is more than likely working on a set-top/OTT play of its own, so the legal nightmares alone here should say, "Danger, danger Will Robinson."
Intel, you need to man up. Everyone wants to see your service venture dead on arrival. You need to devise some "Game of Thrones" strategy here if you really want to win, and buy a company that already has a customer base and/or cool technology to set you apart from the me-too services.
Hulu and TiVo look like obvious choices, but Hulu is owned by Comcast, Fox and Disney, so fat chance there. At close of business yesterday, TiVo had a market capitalization of around $1.5 billion, so it's affordable and you get a customer base, software and lots of patents. I also think TiVo keeps shooting itself in the foot with its "You must call to unsubscribe your old dying hardware, so we can try to upsell you to a 'lifetime' contract, despite the fact you just bought a shiny new box from us" policy.
If you really want to be a disruptor Intel, go buy Aereo and add services to it. Aereo keeps on winning court cases, it is small right now enough you can get it for a song, and it offers a unique service people are paying for – accessing broadcast TV outside of a geographic region. Anything else than an Aereo service just means you will be a little fish in a big pond that will die of starvation.
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