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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  • new-paradigm - Thursday, February 14, 2013 - link

    Ok, so I can understand how dvr is based on having live tv channels and a tuner.

    Whilst the omission of both dvr and tuner functionality may be fine for the US, where the tv market is pretty much only catered for by payed for cable services, over here in the uk, and many other parts of the world, there are actually very good freeview broadcasting services and channels.

    I think the lack of dvr and tuner functionality would be a big factor in its success in these markets.

    Personally the only reason I haven't plumped for a roku or similar, and am now looking to build a media center pc is because I want the dvr and tuner functionality as well as the catch-up and streaming internet based tv services.
    Reply
  • new-paradigm - Thursday, February 14, 2013 - link

    For example... in the uk this will be competing with youview (http://www.youview.com/), a free dvr and catch up initiative, which has boxes on offer from nearly all major internet and tv providers, as well as stand alone boxes. This works with the freeview tv channels (about 70) which a lot of people have instead of paying for cable or sky. Reply
  • Exodite - Thursday, February 14, 2013 - link

    Somehow I can't help but think than any development along this line is going to end up being stillborn.

    Not because of content, or rather content /owner/, issues but rather by being too little too late.

    There's already YouTube, Google is currently monetizing the platform and I can only see services like that being the real future of television.

    The Internet and the WWW is a marvelous thing, we really don't need a new delivery system for a dying media platform when we already have something better.
    Reply
  • new-paradigm - Thursday, February 14, 2013 - link

    I don't really see this as a new delivery system, merely an extension of the internet system and getting more content on to it... in the uk this is already happening as various mainstream channels start to make their content available through their own web based portals (iplayer, 4OD, etc) Reply
  • Midwayman - Thursday, February 14, 2013 - link

    The media companies have repeatedly shut down previous attempts to get streaming media to the TV. Even streaming content they already offer on the web. They want eyeballs on adds and the whole industry has a titanic amount of inertia. They don't want to change their business model. Honestly Amazon or Netflix have a better chance of forcing it on them by producing original content that is only available streaming. If they take off as 'must have' channels and refuse to be bundled into cable they media companies might have to follow suit. Reply
  • CSMR - Thursday, February 14, 2013 - link

    What is the current wholesale cost of downloading a GB?
    That will determine whether IPTV is successful.
    Reply
  • fteoath64 - Saturday, February 16, 2013 - link

    It is not the cost in terms of money for downloads. It is the time delay wasted DOING IT so there is no interest from users. No instant gratification!. Click Buy and it plays right away!. If you have to wait, you might not bother!. If anyone subscribe to IPTV, they will be given a fat pipe period. Now how fat the internet pipe depends on the provider. They will restrict the bandwidth based on current pricing levels.

    IPTV can be successful only if people pay a fixed tier of bundle based on how much they use. A bit like cable-premiums channels now but if a user did not use much, he might just pay the minimum amount rather than a fixed premium every month. The old model habit is hard to die but usage based is the fairest of all, yet providers are not really doing it.
    Reply
  • tcitrus - Thursday, February 14, 2013 - link

    I love Intel. I understand the concept. But what why would I change my current TV set up for Intel's box? I already have Playstation 3 with apps such as Hulu, Youtube, Crackle, and it is a blue ray player. I have Roku, which is very small and portable. On top of all that I have a Dish Network w/ DVR and includes Blockbuster. Why get another box? Convince me why I should switch. Reply
  • This Guy - Thursday, February 14, 2013 - link

    I'ld like the ability to run steam on it. If their OS is a derivative of their linux work this might be possible.

    I'ld like instant on and ssd like speed for the OS, settings and user data.

    I would like the UI to minimise upsells to a small and consistant part of the screen. The UI should focus on my content and make it eaiser for me to view/use it.

    I would love for Intel to get global content licences. I live in Australia where media is vastly overpriced. Many smaller markets have it far worse.
    Reply
  • Concillian - Thursday, February 14, 2013 - link

    The biggest problem faced with getting into TV is that the media companies own the pipes. They already restrict access in an effort to keep people from cutting the cord (very difficult to stream sporting events without buying a very expensive package, for example.)

    It doesn't matter what the hardware looks like. The block is getting the people who own the cable companies to give up their $100+ bundling strategy that is currently working and working well to milk the average consumer.

    Until we have viable broadband options that are NOT TV providers, I don't see this changing. Hardware doesn't matter. The whole landscape of big media needs major changes before anything like this can become viable.
    Reply

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