Intel set to sell set to box Internet TV this year
Chip giant Intel rolling out set-top box Internet TV service
Intel, the world’s largest semiconductor maker, plans to offer pay television through a set-top box with Web connections, creating new competition for incumbent providers like Time Warner Cable and DirecTV.
By Cliff Edwards
Intel said it plans to begin selling a set-top box offering Internet-based television service this year and is confident it can obtain programming.
Eric Free, a vice president and general manager of the Santa Clara, Calif.-based chip-maker, outlined plans for the product and service Tuesday at the TV of Tomorrow conference in San Francisco.
“Ultimately we want to deliver a better form of television,” Free said. “We’re very confident we’ll get the content we need to launch later this year.”
Intel, the world’s largest semiconductor maker, plans to offer pay television through Web connections, creating new competition for incumbent providers like Time Warner Cable and DirecTV.
Intel has been testing the service among employees as it seeks programming from media companies such as Time Warner, Comcast NBC Universal and Viacom.
The company hopes to build a customer base on par with satellite services, Free said.
DirecTV had 20.1 million customers at year end, while Dish Network had 14.1 million, according to company reports.
Intel hasn’t provided pricing details yet.
Consumers increasingly view TV on their own schedule, wherever they are, Free said. They would prefer an experience at home where they don’t have to wade through hundreds of channels and can purchase and view shows based on their interests, he said.
“One of the places where innovation really hasn’t happened, at least not at the pace of your phone, your tablet or your laptop, is really within the pay-TV stack,” Free said.
With its own set-top box, Intel is betting it can create a flexible service that gives subscribers more choices over the channels they receive and better ways to navigate content, Erik Huggers, general manager of Intel Media, said in February. Intel plans to offer live channels and on-demand programming.
Time Warner Cable and other pay-TV operators are offering incentives to media companies to withhold content from Web-based entertainment services such as the one Intel is pursuing, people with knowledge of the matter said this month.
The incentives can take the form of higher payments, or they can include threats to drop programming, the people said then.
Networks such as Time Warner’s CNN, NBC Universal’s USA Network and Viacom’s MTV would give Intel critical mass to offer consumers an alternative to established pay-TV services.
Other than the number of subs satellite operators are a poor analogy to what Intel is doing. . Because satellite operators own their own transport and control the quality and amount of bandwidth to the customer it is much easier for satellite operators to compete against cable for live TV than with the approach Intel planning to take.
Intel owns neither the content, nor the transport. Therefore the viewing experience will depend on the Quality-Of-Service of the Internet connection the customer gets from the MSO. To be sure other OTTP operators like Netflix and Vudu have the same dependency but they're not trying to deliver live TV that will get interrupted when the Interconnection slows down. If a movie gets interrupted its frustrating but one just restarts it when the net connection returns. Who wants to watch recorded versions of CNN news? That's not live TV.
"WITHOUT GIVING TOO MUCH AWAY, the user interface seemed to hover beautifully above the currently playing show. An elegant simple menu made it easy to switch between channels or to pick and rent a recent film. It was light years from the cumbersome garbage that takes up most of the screen when using a standard cable-channel picker.
There was a wide array of popular channels to choose from that would be familiar to any couch potato, though the final lineup is still being formulated. Equally important, when you hit the button on the remote, the TV seemed to jump to the next channel faster than is typical on cable. There also is a time-shifting aspect that goes beyond DVR, allowing you to go back through recent episodes."
One wonders: Why hasn't TV always been this way?
Others who've viewed the project are enthusiastic, too. "The No. 1 thing I noticed was speed," says Patrick Moorhead of Moor Insights & Strategy. Intel's horsepower in the set-top is partially responsible for this, but multiple data centers that Intel is building to serve video also were a factor. "A lot of the value comes from what they've done on the back end," says Moorhead. "They have the highest-performance Intel servers and video-encoding technology." And he notes, "This is live television," unlike other over-the-top offerings, like those from the TV network consortium Hulu, Apple's (AAPL) AppleTV, Netflix (NFLX), or closely held Roku, which merely provide on-demand content from a back catalog. "It's something I've never experienced before" in an Internet offering, Moorhead adds.