Intel close to striking deals for pay TV service


IntelIntel is making progress in talks with Time Warner, NBC Universal and Viacom to score TV shows and films for a first-of-its kind online pay-TV service, according to a Bloomberg article. Using its own set-top box, Intel plans to offer an online product this year. Intel is seeking access to live television, a library of on-demand shows and rights for a cloud-based DVR, the article said. Customers would receive programming on TV sets, computers and mobile devices.

So far, Intel, the world’s largest chipmaker, is negotiating financial terms with the companies, which have signed off on the broad outlines of the proposed service, with some aspects still to be settled. Other network owners aren’t as far along, Bloomberg sources said.

Les Moonves, CBS Corp. CEO, said on a 2/14 earnings call that his company is having conversations with Intel. Time Warner CEO Jeff Bewkes said he would also consider providing content to Internet pay-TV services like the one proposed by Intel. The chipmaker is about to begin financial negotiations with News Corp. as well, the story said. Discussions with Disney and CBS are at a more preliminary stage.

“Not just Time Warner, but all of us have to look at these new distribution methods and whether they’re viable,” Bewkes said 3/4 at an investor conference. “No one has come along with that yet, and we’d look at it.”

Networks such as Time Warner’s CNN, NBC’s USA Network and Viacom’s MTV would give Intel critical mass to offer consumers an alternative to established pay-TV services. Using its own set-top box, Intel plans to offer an online product this year, Erik Huggers, Intel’s vice president for media, said last month. That would represent new competition for incumbent operators like Comcast and DirecTV.

Intel is betting it can create a more flexible service, delivered through consumers’ broadband accounts, that gives subscribers more choices over the channels they receive and offers an easier-to-use electronic programming guide, Huggers said.

See the Bloomberg story here

RBR-TVBR observation: The rules have changed. An iPTV set top box that’s more like traditional cable boxes and less clunky like Netflix via Wii, for example, is something viewers would embrace—especially given the service would have TV Everywhere capabilities. What it all boils down to is pricing and programming. The more a la carte network and individual program options an Intel iPTV set top box could provide (bringing down a monthly viewing bill significantly), the more traction it would gain with subscribers. Bottom line, though, to make this service’s pricing competitive with the MSO’s, it would have to be almost a completely VOD/a la carte offering to reduce licensing fees from the content providers.