The 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.
What is it? What I'd Like to See
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  • mrdude - Thursday, February 14, 2013 - link

    Targeted ads have been available since Google, Microsoft and others have been prowling our online behaviors. These "new" ads aren't new at all and they're something that the big content providers have had access to, and probably even used to some extent, for a while now.

    These ads aren't going to supplement the billions upon billions of dollars that they'd lose by providing a la carte programming. Ask Facebook :P
    Reply
  • poorted - Friday, February 15, 2013 - link

    I agree with this for the ads - yes, premium networks still need to be paid by subscription, but there is enough over the air programming that is entirely ad supported to show that that model works too.

    From the point of view of that broadcaster, why would they care if the viewers are watching over the air or over the internet if they are watching the same ads? In fact for that broadcaster, the internet route would even be preferable, they get targeted ads, and people can tune in from outside their transmitter range if they like.

    From their point of view, they get more viewers, more ad revenue, and better demographic information.
    Reply
  • taltamir - Tuesday, February 19, 2013 - link

    People went to piracy because it supplied a better product, what people actually wanted.
    Netflix and hulu came in and gave people that same product.
    The IP owners are desperately clinging to their guns and many view netflix and hulu and the like as an enemy.

    The intel offering is basically netflix, only crappy. With the promise of new content. There is absolutely no reason netflix can't offer new content but the MPAA members don't want them to. Intel is trying to appeal to them with a tech that gives them that same measure of control and provides the same sub-par service that nobody actually wants to buy.
    Reply
  • taltamir - Tuesday, February 19, 2013 - link

    " clinging to their guns" - should be clinging to their distribution models... I must have had something else on my mind Reply
  • Crono - Thursday, February 14, 2013 - link

    ... At least it will for me. I don't want channel based subscriptions like cable companies provide, nor do I want a bundle of multiple services like existing streaming boxes.
    I just want the ability to select individual currently airing programs and internet content (podcasts and other episodic content) so I don't have to wade through reality shows. I don't want to see ads or commercials, either.

    Now if such an a la carte service were available even at a premium, I wouldn't hesitate to get it. I don't like cable TV anymore, I like being ble to watch documentaries, educational programming, and shows like Top Gear. Give me something like that and a good hardware/software device, Intel.
    Reply
  • Krysto - Thursday, February 14, 2013 - link

    Only if we ignore that Intel has pretty much failed at anything that doesn't have to do with PC chips. They've only managed to create a relatively sustainable business in the SSD market, but they are not the best, nor the biggest there.

    The one who gets the smart TV market is not going to be a mostly hardware company. And just wait until you hear how much these Intel set top boxes are going to cost....that should wake people up to reality pretty fast.
    Reply
  • poorted - Friday, February 15, 2013 - link

    True, unless their play is just to enter the market with awesome devices at reasonable prices but leverage all the cable companies to use their hardware. If they can get the TV market using their chips or standardized on x86 or whatever, then essentially they wouldn't care if their consumer offerings burn cash and fail, they'd have the bigger victory that they haven't been able to get in the mobile space. Reply
  • IanCutress - Thursday, February 14, 2013 - link

    Not sure how it entirely works in the US, but in the UK we all get five basic channels for free, two from the BBC (no ads) and three free-to-air (with ads). For a £20 one-off set top box we get Freeview, another 30 channels or so, all with adverts apart from the BBC ones. For a bit more you can buy a box with Freeview HD and Freeview+, allowing a DVR type of arrangement. To watch any BBC program broadcast in the past week, we get iPlayer, and ITV/C4 have content on their On-Demand services too.

    The only show(s) I watch religiously are Top Gear and Formula 1. Top Gear is BBC2, so covered by normal TV and iPlayer, and Formula 1 is in a weird flux where all the races are shown in full on a cable company (Sky), half the races are show in full on the BBC, and the other half are highlights-only on the BBC.

    The only other things I watch are usually BBC issued comedy - QI, Mock The Week, Have I Got News For You, or sometimes 8 Out Of 10 Cats on C4.

    At this point in time the only reason I'd ever want to pay £/month is for the Formula 1 races. Don't have time to sit and endlessly watch X or Y, and if it's a well reviewed program (Breaking Bad, Six Feet Under, House) I tend to get the DVD box set. There's also my video library backed up on PC which I can stream when needed.

    Any Intel TV venture would hit the US/North America first, so I wonder if a Europe launch would occur even within 12 months of that. Not that I have any need for it, unless it's a silly £10/month. But even at that price, my ISP will bundle in their cable TV service with my super fast internet connection (but it won't have Formula 1).

    IMO most 'live' content becomes less important as you age, the obvious exception is sport. I'm happy to catch most things 24hr+ after they air with an on-demand or catch-up service.
    Reply
  • mrdude - Thursday, February 14, 2013 - link

    Hasn't this been tried many times before? with each previous suitor flatly denied by the big content companies?

    The reason these TV channels are packaged together is because they're all under a single network. For example, ABC (Disney) owns all 50 varieties of ESPN and other channels as well. If you want ABC's (read: Disney's) channels then you've got to sign up to the lot of them. This is a practice that's mimicked by the other companies, and that ultimately leads to a stranglehold on all things TV.

    While I appreciate Intel's goals here, and I do believe that a la carte TV and entertainment would be amazing, it's not going to happen unless those companies can compensate the decreased $$ per customer by volume. But considering the very small relative number of people who have cut the cord, this makes the entire scenario extremely unlikely.

    Then there's the other aspects of this to consider, like ads, pirating (YARRRR!!), web presence, and pricing.

    Furthermore, if this is going to be another one of these 'Intel only, everybody else go screw themselves' approaches with respect to hardware (again), then it's going to fail before it even starts. Intel's WiDi is an excellent example. It's a fantastic idea and really forward thinking, but the management decided to sell it with 'Intel only' and as a result it's gone nowhere, slipping inevitably closer to irrelevancy.
    Reply
  • Porkfist - Thursday, February 14, 2013 - link

    To be suitable for general consumption I'm certain this box will be very limited in it's capabilities. That being said, I would find it very difficult to abandon my HTPC in favor of a box that would limit my flexibility. I suppose I would buy in, only if you are not required to have their streaming box. If that was the case, then it would come down to price.

    I'm currently using XBMC, Windows Media Center with an HDHomerun and a Netflix subscription. I have everything I need. I would like to have some other stuff, such as HBO or Comedy Central but I don't need it. So give me the option to get that additional content, at a reasonable price, and let me roll it into my current setup. If you do that, you've got me hook, line and sinker.
    Reply

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