Earlier this week Intel announced what we'd heard rumors of in months past, that it would be creating an IPTV service along with a custom software and hardware platform to deliver it direct to consumers. A few hours after the announcement, I had the opportunity to speak with Erik Huggers, formerly of the BBC and currently heading up Intel's new Media division.

For years Intel has tried to grab a slice of the TV business. Remember the Intel CE series of Atom based SoCs? How about Sandy Bridge's Intel Insider technology? Both of these were focused attempts to solve problems within the TV industry, but both ultimately went no where. Intel's solutions thus far have been too narrow in scope to do anything.
The TV today reminds me a lot of smartphones in the early 2000s. There's tons of potential, but largely ruined by slow hardware, kludgy user interfaces and heavy fragmentation both on the content side and on the cross platform compatibility side. Much like the smartphone, the solution to revolutionizing the TV as a platform is unlikely to come from within the existing market. And just like the smartphone revolution, a disruptive solution here may very well come from a computing company.

What Is It?

At a high level Intel's unnamed TV play seems to work like this. Intel negotiates deals with content providers, said content lives on a server farm somewhere (likely running tons of Xeons courtesy of mother Intel). Using a box that Intel will sell you, you'll get access to this content over the Internet. The box will run an OS and software layer both developed by Intel. The content will include live TV, traditionally only available via a cable TV subscription. The box Intel will sell you won't act as a traditional PVR/DVR, instead you'll be able to activate a catch-up feature to pull down older episodes after they air, as well as live TV. How far back you'll be able to catch up will depend on the content license, it's technically feasible to go back as far as you'd like - but not all content owners will allow it. Intel's service will also include video on demand features to fill this gap. The goal is to provide one platform where you can get access to everything: live TV, episodes/content that have already aired, and even older content through VoD.
The content will be bundled together in some form. This isn't a purely á la carte TV service, but rather bundles put together by Intel Media rather than your cable company. Think cable channel/network bundling, but perhaps more granular than you're used to. Simply offering the same bundles at the same price as your cable company won't work, so I suspect the bundles will have to be more user friendly (more sensible, smaller, etc…).

ATI's OCUR CableCard Tuner for PCs, another failed solution to the problem from 7 years ago

Intel doesn't seem to have any intentions of keeping the content exclusive to this one box either. Erik wants to see this content on Ultrabooks, smartphones and tablets as well as on your TV. It sounds a lot like the holy grail of digital convergence: any content, on any device, anywhere. Netflix was really one of the first to achieve this level of ubiquity, but only really for older content. Intel seems to want to do this with live TV.
Intel isn't talking about bitrates or codecs yet, nor is it disclosing what content providers have already signed up for the service. The platform will launch this year and it'll be immediately apparent whether or not Intel is on the right track after that happens. 
Pricing is also unknown at this point. Erik was careful not to brand Intel's TV service as a value play, implying that you may not actually save any money vs. your current cable provider. It's pretty obvious from the start though that Intel can't just offer a better experience than your cable TV provider, it also has to offer a cost competitive platform as well. 
The Backstory: Why Get into the TV Business?
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  • Conficio - Sunday, February 17, 2013 - link

    For anything than news and live events, such as sports, etc. There is no reason for any IPTC channels and line up. With hundreds or even thousands of channels to choose from it is useless to have any 24/7 program that includes a few highlights and a lot of filler.

    What really needs to happen is build a platform that can monetize a movie/show/episode per view ideally on an egalitarian price (99 cents per hour?). Remember how iTunes made the turn around for digital online music that was not pirated? It made it because it simplified the price question. One song, a buck? Yes, any song the same price! I'll always spend a dollar for a song. The same must be working on an hour of entertainment. Movies in the theater, cost mostly the same, even if they are of different length, quality of fame of cast/director. Make the online consumption the same simple price model and allow a rewind of the same show within 30 days w/o paying again (or make that lifetime).

    I can't tell you what the right price/h is but an equal price is right. May be two prices, one with advertisement, one w/o. The producers will make more money with popular shows and each show becomes its own franchise, which does nto need to live next to duds in a 24/7 lineup.

    Anything short of that is meh!
  • lopri - Sunday, February 17, 2013 - link

    But I never understood the concept of Netflix or whatever media box (Yuku?). I still don't know what they exactly do, other than maybe the let you rent movies or shows that they have in their library.

    Can one watch, say, American Idol real-time and cast her/his votes with these devices?
    Can you watch Rachel Maddow show real-time? I mean, it's a daily news show. You don't watch a day's news the next day.
    Can kids watch Sunday morning shows or Saturday morning cartoons?
    Can you watch Super Bowl or baseball games live?
    What about Academy awards or some such?

    Can one do all of the above after "cutting the cord"? This is a genuine question because I have never paid attention to this type of devices.
  • losttsol - Monday, February 18, 2013 - link

    Dear Intel,
    I'll take ESPN and Discovery Channel. My wife wants Bravo and E. I'll OTA my local channels. The cable company can choke on the rest. Make it happen. Thanks.
  • jackoatmon - Monday, February 18, 2013 - link

    Someone needs to make a device. A fully integrated solution with a content backend. Think Netflix with way more concurrent selection as an interface on a clean device that you get on a subsidized contract model like a phone.

    It would be iPhone for TV.

    Just plug it in and kabam.

    Of course we all know this is exactly what it needs to be and it is beyond question that this is what it will be. It's just a question of how long it will take Apple to make - it or someone else to wake the fuck up for once and smell the coffee and pick the low hanging fruit.
  • jameskatt - Tuesday, February 19, 2013 - link

    The biggest problem for Intel is getting the content from the studios. Sure, Intel can get the same content as Netflix. But if it is going to get first-run, original, and new content, it will have to negotiate with the studios for it.

    The biggest impediment to getting content from the studios is that CableTV Companies - such as Comcast - pay the studios BILLIONS of dollars for new content. When TV shows go into syndication, the studios expect to make BILLIONS of dollars for their product. An CableTV Companies are ready and WILLING to pay them the big bucks. After all, it is the high cost of cableTV that pays for this content.

    The problem is, Intel wants to give the studios PENNIES ON THE DOLLAR for their content. This is simply not going to fly. If the studios approve of this, then CableTV Companies are going to yell and scream and demand a similar deal. Studios are going to LOSE BILLIONS OF DOLLARS in revenue. Thus, this will NEVER happen. The only low cost content we will get is the old content or near worthless content.

    The next big impediment is that the CableTV Companies are themselves producers of content. Comcast - for example - owns NBC and Universal Studios. Why would Comcast want to shoot its profits in the foot by agreeing to a lowball deal? It won't.

    The third big impediment is that The CableTV Companies nearly own the entire ecosystem for TV. They provide the Cable, the Internet, the Phone lines. They provide the Cable TV Box and DVR. They provide the CableTV software. They provider the iPad app for streaming. Some like Comcast even create the content. The only thing the consumer has to provide is the television. Thus, why would any CableTV company want to let anyone into their ecosystem? They won't. And they strongly compete. And they have the money - more than Intel has to compete in this arena.

    Intel will fail as others have failed before it. Intel's only incentive is to sell its hardware. But it won't be able to differentiate its product from its competitors so long as it will pay pennies on the dollar for the content.
  • SleepyItes - Wednesday, February 20, 2013 - link

    As with many people here, I am pessimistic about the ability for Intel to overcome the dominant influence of Cable ISP localized monopolies such as Comcast and Time Warner. These companies use their vast profits from their high-speed internet customers to ensure that they enjoy a similar lack of competition in the TV content space for as long as it is profitable. If you pay for cable internet (as I reluctantly do as there is no other option in my area), you are supporting their cause.

    The solution must come from a variety of sources, such as heavy government regulation of the existing Cable ISP infrastructure, encouragement of regulated competition via subsidization for laying new infrastructure (as Google has started to pick up where Verizon FiOS left off), and content producers who are willing to stand up to the big cable companies and network conglomerates, and provide their content directly to consumers via web based services. Netflix has shown it can be done with House of Cards (and to be fair there have been other successful web series), and now I think others need to follow suit. AMC Networks, HBO and Showtime are some of the best positioned content owners/producers to do this (I still can't believe that you can't subscribe to an online-only HBO or Showtime account).

    Even though my wife hasn't let me cut the (Satellite) cord yet, the future is clearly headed toward a more sophisticated content delivery system than Cable or Satellite TV can offer in their current state. I hope that Intel can manage it without putting more consumer money in the pockets of Comcast and Time Warner.


    Now, to Anand's initial request:

    I think a tiered or a la carte service cost of $20-$50 per month is reasonable for most families, if this truly fills the "live cable and DVR" gap. Getting the equipment for free/cheap (multiple rooms) with a two year service contract also seems more enticing than buying it outright, but I would be open to either option.

    I would expect at least the equivalent of a HD DVR, but the idea of being able to stream live/recent shows from the cloud is much better, and could seal the deal, as long as you can still fast-forward through the commercials. I would also like to see the ability to play most, if not all, content on my iPad (at least when I am on my home network). DirecTV has this and I absolutely love it. It would also be nice if the devices on the same network talked to each other, so you could pause in one room and resume in another (another feature of DirecTV that I like).

    Personally, I would prefer a package that included major networks (NBC, FOX, ABC, etc.) along with 10 or so cable channels such as HGTV, DIY, Food, Bravo, AMC, IFC, FX, BBC, Comedy Central, and Cartoon Network, plus at least the ability to watch local (SF Bay Area) sports. It would be really great if you could add/remove channels or shows on a whim (e.g. During the World Cup).

    I really look forward to seeing who ends up pulling ahead in the TV content delivery wars, and I really hope that it is done in the best interests of consumers.
  • ENCOM OS-12 - Tuesday, March 5, 2013 - link

    I work on the purchasing side of the TV business for a major retailer and feel well informed about the TV business in general. I've worked directly with almost every major TV manufacturer and have been along for the ride with Intel's attempts at entering the TV business both through direct contact with them as well as various manufacturer partnering attempts. AnandTech has always been one of my favorite resources for up to date industry & tech information so I believe you are also well informed when it comes to speculating about Intel's next step. My only addition is that 4K will be arriving later this year and the content delivery concerns were often speculated to be downloadable content. I would think Intel would plant a focus here with regards to future TV models in the near term. Thank you Anand & staff for the many years of great articles and the significant knowledge I have gained from them in selecting PC related products in the past and even televisions today for our customers. Keep up the great work!

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