Times are Changing: Intel Building an IPTV Service + Box
by Anand Lal Shimpi on February 12, 2013 2:30 PM ESTThe most interesting things at CES were the things that weren't at CES. While I'll discuss the others in due time, one notable absence from CES was the often rumored Intel set-top box. Erik Huggers, the head of Intel's new Media division, confirmed today that Intel was working on a complete IPTV solution: service, software and hardware, all to be sold direct to consumers.
Erik confirmed that Intel Media was an all new group within Intel, staffed with folks from Apple, Netflix and Google among other places. Erik himself came from the BBC's Future Media & Technology group. Intel seems to know that it can't pull something like this off using internal talent alone. Bring in smart outsiders then give them the support of Intel seems to be the approach here - and it makes sense.
Details are scarce, and I'd expect them to be for quite some time. Intel committed to launch the box and service this year and it'll support features like catch-up, video on demand as well as live TV - all delivered over the internet. A list of content providers as well as pricing are two notable bits of information that were missing from today's disclosure. Until we get closer to launch, I wouldn't expect to hear anything on either front. Intel did mention that this wasn't a value play, and there was a strong focus on content bundles, which means this is likely not a full á la carte solution that's going to drive cable TV providers out of business.
I'll refrain from speculating publicly here, but there's a lot that makes this interesting. Some questions to ask:
1) Why is Intel getting into the TV business? Why now?
2) If not competing aggressively on pricing, then how will Intel differentiate?
3) Intel's divisions traditionally require high operating margins to survive in the long run.
Unlike Intel's smartphone aspirations, its work in the TV space won't have the time to eventually build up steam. Intel also won't have the burden of playing catch up in a quickly maturing industry. The established players in the cable TV space have done a great job of stifling innovation for quite a while. It's clear that a more revolutionary approach is necessary to liberate live TV content. The question is whether or not Intel can be the first company to succeed where others have failed.
Many expected Apple to be the first to tackle and succeed here. Perhaps Intel will beat them to the punch? (this helps answer question #1 above).
More thoughts on this later.
Source: AllThingsD
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tonyn84 - Tuesday, February 12, 2013 - link
I would sign up for this in a heartbeat if it had the option for HBO. It would also be great if we could get true a'la carte programming, no more subsidizing crap with my monthly bill.smartthanyou - Tuesday, February 12, 2013 - link
Well it seems from the article that we won't get a la carte pricing. There is no reason to think Intel has somehow managed to get cable companies and content providers to completely change the way they do business.It will be interesting to see what Intel comes up with but I am not holding my breath. I am guessing it will have a few cool features but will be expensive and offer limited flexibility in regards to choosing channels.
arsena1 - Tuesday, February 12, 2013 - link
Otherwise almost everything else is available via VOD or similar services. Live sports is the only thing that would make me go back to paying for TV service every month.lurker22 - Tuesday, February 12, 2013 - link
And you already do, as well as all of us who don't watch any ESPN. You're welcome for subsidizing your sports --- well not anymore, I cut the cord 2 months ago and don't miss cable TV at all!GotThumbs - Tuesday, February 12, 2013 - link
Congratulations on your decision to keep more of your money in your pocket!I've been cable free for over two years now. I still have internet via cable modem, but I get my local content via free "over the air" HD programming and I get my movie fix using Netfix. I use Hulu (free) for just a couple of shows I watch as well.
I even cut the cord on my over-priced cell phone contract. I was paying $54.00 for basic phone and text through Verizon. Now I use Page Plus (uses Verizon network). No contracts and for the 1200 plan, I get 1200 talk, 3000 text and 250 mb data for $29.95 mo. Go through Kittywireless and then you can use their free auto-renewal option. My CC gets billed each month just as before, but for 20.00 less. I've found the 250mb of data is more than enough for my needs, as I use wireless for most of my sync data.
I do not work for them, but I'm a fan of saving money and passing on the opportunity to others.
Best wishes on keeping more of your own money over the next four years.
kmmatney - Tuesday, February 12, 2013 - link
Depends how many talk minutes you need, but the Virgin Mobile plan is better IMO. 300 minutes of talk, unlimited text and data for $35. Uses the Sprint network, which seems good where I live (Centennial, CO). No reason not to get a smartphone at that price. You can use Ooma or Obi100 for a virtually free home phone, and this can greatly reduce the need for cell phone talk minutes.chizow - Tuesday, February 12, 2013 - link
I've actually gone the other way, I used to get by on only ESPN and Netflix but Netflix has gone down the dumpers since that whole Kwikster debacle and huge Blu-Ray premium. Instead, I spend that $20/mo on the FIOS fully loaded package which gives me about a hundred HD premium channels as well as full access to ALL season episodes for premium subscriber channels like HBO, SHO, etc online, on-demand. Now that's win, much better than Netflix or even Hulu's partial libraries that don't include current season.That's why I think Intel (and Apple, Google, Netflix etc.) have already lost. The CableCos already have the content licenses with the content providers, most people don't want to pay again. I think Hulu is the only non-CableCo that has a chance because it's ties with Comcast/NBC Universal but I believe Comcast was forced to divest it's stake specifically for anti-trust concerns, not sure though.
In any case, Intel has proven far from infallible lately. Their CPU business is still their bellwether, but they've shown they're very vulnerable outside of their core competencies (see: Larrabee, SSDs, Hydra etc).
cheinonen - Tuesday, February 12, 2013 - link
According to Forbes, ESPN costs the cable company $5.13 per subscriber to carry, and ESPN2 is $0.68 per customer. TNT is the only channel that comes in at more than $1 per person, and that's around $1.10 or so. Given how high the costs are, I imagine that while a lot of people want ESPN (like myself), there are many that probably don't.I wouldn't be horribly surprised to see if the form of ala carte that would be offered up is something like a Sports Tier and a Non-Sports Tier. The Non-Sports people would save a lot of money just by hacking off ESPN, and the Sports people would be far happier to pay $25 a month for a sports package (say ESPN channels, NFL Network, regional Fox Sports channels) and skip everything else.
Of course, if you're ESPN then I have some trouble seeing why you'd do this, when you can easily tell Intel and everyone "Look, everyone gets ESPN, or no one does" and then you probably have a huge issue getting people to pick you over cable. The only way I'd see ESPN being available like that is if they had their own distribution system, where you pay them $20 a month directly though their app, or website, and you stream to that app. No middle man to take profits, and their main risk is that cable companies would revolt against paying them so much when there is an alternative, but maybe they can figure that out.
Ala Carte ESPN and sports is all I want, as I canceled cable when our kids were born and only miss it during football season, but I see a lot of impediments to it happening.
Impulses - Wednesday, February 13, 2013 - link
That's fascinating, never realized ESPN had so much pull... I still subscribe to cable mainly for sports, as do a ton of enthusiasts I imagine. I mostly watch basketball (and they air 4-5 NBA games a week) but I do watch other sports at least once a month, plus stuff like Sportscenter, Sportsnation, etc.I think ESPN's probably limited by their own contracts with the different leagues and student sport associations tho... If they did anything that drew the ire of the cable companies it'd put those other deals in jeopardy, they got to where they are by being the de facto spot for sports on TV after all.
Were premium channels like HBO/SHO included in that Forbes analysis, I'm still surprised the gap is that large. I guess their ad revenue driving potential is still than most tho, since sports is the only thing we'll willingly watch live.
saurabhr8here - Tuesday, February 12, 2013 - link
Not sure what the point of this article is, because it clearly seems that Anandtech is using its platform to push Intel PR. Intel announced the thing and we got to know about it through all news outlets, but there are absolutely no technical details. A'tech has a reputation for its in-depth technical analysis and I would be happy to read that once you guys get a product in your hands. Until then, please stop being like the rest of the tech media.