Anand's Thoughts on Intel's TV Initiative
by Anand Lal Shimpi on February 14, 2013 4:21 PM ESTThe Backstory: Why Get into the TV Business?
Erik presented his plans and got funding from mother Intel on December 8, 2011. In less than 12 months the Intel Media team had built all of the pieces of the puzzle. They'd built the streaming device, the OS, the web services infrastructure, the video infrastructure, everything. Erik told me that he'd never seen an organization move that fast in his career. To the objective outsider, this either means that Intel is putting a ton of support (think: cash) behind this project, or it's going to be half baked. Based on some of my own snooping, I don't think it's the latter. Which then begs the question, why was Intel so eager to go off and build an IPTV service and do all of this work? And why did it have to happen so quickly?
I didn't ask Erik the first question, although I think the answer is obvious. Intel's present success is very closely tied to the PC industry. It's trying to break into the established ARM smartphone and tablet industries to help go where the industry goes, but it does so as a late comer and is currently enjoying all of the struggles associated with that. The TV industry however hasn't really been revolutionized, and it's ripe for change.
The Boxee Box, one of many Intel powered solutions for the TV
We've seen high profile attempts to empower the big screen with devices like the Apple TV or Google TV. Smaller players have made similar attempts (e.g. Boxee Box, Roku). All of these boxes attempt to stream existing cloud based content to your TV, but they don't fundamentally replace a cable TV subscription. For some users, the content you can currently get on any one of these platforms is good enough to augment a cable TV subscription, while for others it's good enough to cut the cord entirely. For cord cutters, the gaps in content that remain are filled by content owner websites (e.g. southparkstudios.com) or through piracy. None of the existing platforms offer a universal solution for live TV either, you sort of have to hope that whoever is broadcasting whatever you want to watch in real time is kind enough to stream it - or you have to wait and watch it later.
The TV market today looks a lot like the smartphone market did not too long ago. There are established players, but no one is really doing it perfectly. There are good ideas, but no platform that unifies them all. Intel is interested in the TV market because it is a consumer facing business that's detached from the PC industry, and one that's ready for a revolution. Getting in early and generating revenue that's detached from PCs would help Intel grow its revenue base, diversify a bit and likely keep investors quite happy. The side benefits are obvious. Any solution here would need a fairly heavy cloud platform to drive it (you have to store, transcode and stream all of that content), plus if you really do pull off a good internet based TV strategy it simply drives usage of all other computing devices as you'd want to be able to stream/consume content on as many different screens as possible.
The "why do it?" question is an easy one to answer, but figuring out whether or not Intel can do it is a different one entirely. Intel certainly has the cash to pull off a dramatic play in the TV space. It also has the ability to customize silicon to put fears to rest of its TV solution being a giant pirate box. However, Intel hasn't traditionally done well in the consumer facing software/services department.
Intel does a great job of building fast silicon, validating it and optimizing software for it, but when was the last time you saw Intel build a gorgeous UI? Even Intel's reference Ultrabooks don't really ooze confidence that the company knows how to build a real consumer device, software, service or experience. The skepticism here is understandable and warranted.
The only solace Intel can offer to the skeptics is the fact that Intel Media is staffed by a combination of Intel insiders as well as from others outside of the company. Erik naturally stressed hiring from Google, Apple and Netflix. Erik himself came from the BBC and admittedly isn't much of a chip-head to begin with. The proof will be in the pudding. Intel hasn't publicly demonstrated anything, it hasn't announced pricing or a channel lineup. With a product launch sometime in 2013, we won't have to wait long to see how this plays out.
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justmy02 - Friday, February 15, 2013 - link
Anand,I'm glad you raised this issue. Like you and many others who have commented here, I dropped my cable subscription years ago, with no regrets. I tried Netflix for a while, and it's reasonably priced for what it offers, but the wait for content is far too long. Amazon Prime is also a good deal, but has limited selection. As you are obviously aware, nearly every content channel suffers from such limitations. I know it's a faux pas to discuss it openly here, but there's one channel with none of these problems: Usenet.
While it's perhaps unfair to make the comparison, it's a realistic one. At the end of the day, paying a cable provider, Hulu, or any of the others for new programming is irrational under current market conditions. There are a few exceptions, such as live sporting events, but many of those are broadcast for free. While one can make a case for Netflix as a means of easily accessing older material, it's no contest for anything recent. I'm sure the content industry would prefer it to be otherwise, but this is the situation in the real world. For an official content channel to win the real value comparison, it will have to offer something similar to the Netflix model, only without restrictions on time of release. When I can get all the music, movies, and television shows ever made for a flat monthly fee, I'll gladly pay it (within reason; it would have to be well below $100/month). Until then, these companies are living in a world of fantasy.
Intel might be able to get a foothold in the current ecosystem, but I'm skeptical. After all, even Apple has failed at negotiating satisfactory deals with content owners. I applaud Intel for moving forward with this; they may develop some useful infrastructure improvements that facilitate the solution to come. That said, the cable companies and the studios will not allow meaningful innovation until large populations are fed up with the dominant business model. Cord-cutters may be common on these forums, but they remain rare overall.
If I have a simple message for Intel, it is the following: Treat this division as a research investment, not to be held to the profitability standard of other units. When the existing market structure collapses, they might be in position to fill the void. Until then, greed, lawyers, and contracts are in the way, and even mighty Intel can't change that.
RandomUsername3245 - Friday, February 15, 2013 - link
My big problem with Usenet is that it is illegal, and the Usenet services can easily tie your IP address to the content you download. TV shows are just not worth the risk of a lawsuit or criminal conviction. (I also think TV shows are generally not worth their price as I cut the cable 5 years ago and am not going back.)RandomUsername3245 - Friday, February 15, 2013 - link
I'll be shocked if Intel can do more than the current players: unlimited streaming of old content for a fixed monthly fee (Netflix), pay-per-view new content (Vudu, Netflix, Xbox, etc), and a few limited episodes from the current season (Hulu Plus). They will not have ESPN networks, and they will probably not have the premium channels. The cable industry is an entrenched monopoly / oligopoly. They have *no* motivation to allow a new competitor access to their media content.Also, you guys desperately need to tie these discussion threads into the anandtech forums. It's next to useless actually trying to keep up with a discussion in these under-article comments. I think Arstechnica does this, though I bet it would be a bit change to the website / forums codebase!!
Jumangi - Friday, February 15, 2013 - link
The pie in the sky dreams continue. Apple has been trying to pry open this content door for years with no success along with others and no success. Unless Intel is willing to throw massive amounts at the content providers they are not going to break with the cable and satellite companies.I truly believe what Netflix is doing by starting to make their own content is how this will ultimately happen, not current cable shows on 'Internet TV' packages. The old Hollywood guard just can't bring themselves to change.
will2 - Friday, February 15, 2013 - link
What I and a few friends want is not a tradional TV, but a small multipurpose mediastreamer box (running perhaps Android or Ubuntu) that can accept input from a TV-Tuner stick, media selected from a USB drive, SD slot, WiFi, Ethernet, and deliver the stream to a big screen Monitor and/or sound-system, either by HDMI, or WiFi. (maybe Miracast).The UI can be from a smartphone or dedicated wireless 'remote'. That way, the USER is in control and has flexibility to freely to watch or listen to material on screen(s) & loadspeakers in ANY room, without having to move the streamer box. Non of that frustrating 'can't watch here', or problems of not all of the media is connected.
will2 - Friday, February 15, 2013 - link
I meant to add, my idea of a Smart TV, it is just another service in a 'home network' that can select/view content from the internet (be it ADSL or 3/4G), that can also monitor a home security video/alarms, i.e the 'internet of things' that Intel, MS & Google mention about once a year.That way, as you move from room to room, much as you switch on a light, you can interact with the 'Smart TV' and where any intruder detection can overide the screen content with video of the intruder.
sotoa - Friday, February 15, 2013 - link
I like using Hulu since they have the shows that I miss when they go live. The quality and audio is ok. Just don't like how I have to wait 1 WEEK after the show went live to see it. I need Hulu plus for that, but I understand the business aspect (fine). But boost the audio and video quality too please! Want 5.1 audio?... I'd pay extra.Here's a problem I see with online ads (Hulu for example). I answer their questions about "Does this ad pertain to you?" and they are NOT tailoring the ads to me. I'm subjected to tampon and girly ads, but I'm a guy! You'd think that after using Hulu for years, that they would "know" me. Hence their ads fall on my deaf ears. I do give them credit for finally making the ads more high def rather than the horrible visuals we used to be.
Basically, these companies delivering entertainment need to figure out how to sell their ads and therefore will be more profitable. Then they need to be able to give us tiers of quality (visual & audio), plenty of choices of content, and be able to watch it from any device.
I hope Intel's device (box) would be far far superior than these dinky boxes that cable companies give (Cablevision, Timewarner, Comcast, etc). These boxes burn so much electricity, are slow, and break a lot.
andrewaggb - Friday, February 15, 2013 - link
I'm really only interested in specific content. Not 'channels', bundles, and other garbage that is forced on us.I would like to be able to pick specific current tv shows and sports teams that I'm interested in and be able to watch them as close to live (sports) or as soon as available (tv shows).
PVR's are useless if you can just watch what you want when you want it.
But I'm in Canada so I don't expect anything to come of this because we're totally screwed by our providers and our market is a secondary market at best.... sigh.
Exelius - Friday, February 15, 2013 - link
There is absolutely, positively no way that something like this will ever happen.The problem is simply distribution. Current cable/satellite video programming is distributed via what is essentially a hybrid unicast/multicast system that multicasts the most popular networks and unicasts the less popular ones. The cable companies don't do this because they hate you and want to force you to watch what they want you to watch. I mean, not that they don't want that, but that's not why multicast video exists.
Multicast video exists because of the last mile problem: cable is effectively one huge shared pipe for everyone in your neighborhood. So they take most of that pipe and allocate it to cable TV, which your cable box then decrypts based on what channels you've paid for. Then they take that huge pipe and allocate the rest of it for internet traffic: that's right, everything you do on the internet is broadcast to everyone in your neighborhood (albeit encrypted.)
Multicast streams drive down the effective bandwidth usage per user while watching video. If 1,000 people in an area are watching an uncompressed HD stream at 10 Mbps, their effective usage per viewer is 10kbps for an HD stream. Take those same 1000 people and switch even 10% of them to watching a 1Mbps compressed HD stream, and suddenly your effective usage per user jumps to 110kbps per user. A 10% shift in viewing patterns resulted in a 1000% jump in bandwidth usage per user for *the exact same activity*. You can do some things with multiplexing and line filters to alleviate this; but the problem doesn't really go away.
This is why we, in the US, will not have this type of a-la-carte cable service in the near future. Companies are working to replace last-mile broadcast networks like cable with fiber optics, but it's expensive and will take at least a decade (probably two or three) to complete. Because cable is a last-mile broadcast network, it almost requires a multicast solution to video consumption.
This is MUCH more of a structural problem than the media gives it credit: I would love to see a reputable tech site really dig in to how utterly incompatible the vision we all have of how video should work is with the technical reality of the broadband industry in the US today.
More on the topic of this article, I really just don't get what Intel is doing here. They are a company who has traditionally sold technology products through channel sales to OEM technology manufacturers. Now they're trying to be a middleman between consumers and media companies? What does Intel think they have that everyone else doesn't? Why would they be more successful here than Apple or Microsoft? The key barrier in this market is not technology, it's content rights and consumer marketing. Neither of those are things Intel has any experience with. I get diversification, but I think they're too late to the game for that.
Death666Angel - Friday, February 15, 2013 - link
I don't quite think the smartphone analogy works. Whereas the state of smartphones was similar all over the world, I feel like TV is a very different beast on other countries. I know for example that German Pay TV is really struggling. People just don't want to pay for TV here. I personally use TV for a few news shows. But I got my actual content by buying the DVDs/BDs of shows and movies I like. I'm not behind my friends either, because they wait for the localization of the stuff while I watch it in the original. I spend a good deal on that, but it's different than something like a cable subscription you describe. I own these BDs/DVDs, I can do all sorts of things with them. With subscriptions, once I cancel, I don't own anything anymore. I love re watching older stuff. Or catching up on the old season before the new one comes out. I don't think I'd be in the market for anything Intel can offer. And I don't see many of my friends there either.