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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  • trip1ex - Friday, February 15, 2013 - link

    I don't see Intel doing much in this space. What experience do they have with UI? Storing content on servers? Designing hardware outside of chips? talking to content companies?

    Apple is in a way better position. Google too. And MS even.

    And the problem has always been one of changing the entrenched cable/satellite broadcast system model that content distributors are comfortable with and are afraid to move away from.

    Cord cutting doesn't make much sense for families of four although pricing varies depending on where you love.

    First the single person it makes much more sense in general although as always it depends on how much tv you watch.

    I am fine with the price of cable for my family. I just would like a better interface/equipment to access the content cable delivers. WMC ain't bad but it ain't being supported any more. It has annoying bugs. The cable company's box has a Ma Bell feel to it that comes hand in hand with having little to no competition. TiVo was decent but have gone backwards since the Series 2 came out. The cable companies are too strong for them to compete.

    Yes I would like a little more flexibility in the packages. But for the most part an expanded basic package covers my needs.
    Reply
  • Anand Lal Shimpi - Friday, February 15, 2013 - link

    This is very interesting. I feel like the UI/hardware/experience is an easier problem for Intel to solve, pricing may be the more difficult one.

    Anyone else feel like pricing is ok and it's just the UI/UX that needs work?
    Reply
  • teiglin - Friday, February 15, 2013 - link

    It's an interesting point, but hardly an insurmountable one for a company like Intel. The issue of getting TV via a computer UI is hardly new and there are many people they could get (or may already have) to handle this well, if they are smart. I just posted my general thoughts below, but for a lot of people within my age range (I'm 29), the issue is that cable starts at $50/month for almost nothing that isn't already available for free and goes up rapidly from there, easily into the $200 range if you want everything. Certainly many people can and do pay that, but as a single-income household of four, I'm happy to pinch my Benjamins and subsist free of subscription content.

    Anyway, the UI is obviously important and they do need to nail it--this point definitely deserves to be hammered home--but for me at least, they would need to be significantly better than cable in a number of ways to justify even a fraction of cable's cost. Flexibility combined with a smart pricing (and even bundling) scheme is definitely one that would help draw me in.
    Reply
  • mrdude - Friday, February 15, 2013 - link

    The lack of a proper UI and capable cheap hardware aren't the reasons that this hasn't taken off, Anand. If a company, namely a big content/ISP provider, were to decide to follow through with this (and likely on their own), the UI and hardware would be the least of their concerns.

    As for pricing, it'd have to be significantly cheaper considering you're also paying for the bandwidth (and you'll need more of it) on top of the service provided. I'd pay ~20-30$ for something that provided me with HBOGO, popular sports programs (Fox Soccer, *some* ESPN, and NBA TV, BEin Sports), the local over-the-air channels, and a few others like BBC, Science, and Comedy Central. If it can't tick most, and preferably all, of these boxes then it's a no-go. If it did tick all of them, I reckon ~$30 is fair.

    The UI/software is a bigger issue than it seems at first. If it's very fragmented like it is now with Amazon, Google, Hulu, Netflix, and HBO all having their own separate services, it's unlikely to succeed from a consumer standpoint. Some sort of unification is going to be required, and the software will have to be designed from the ground up to reflect that endeavor. For example, there's going to have to be a step away from the "Click here for Netflix content," and rummaging through only Netflix . If a device is going to succeed, it'll have to have a search/filtering approach that unifies the content, not by provider but by the content itself. That also requires stepping on more toes.
    Reply
  • fteoath64 - Saturday, February 16, 2013 - link

    @trip1ex: Your points are spot on!. This means Intel did NOT invest in R&D or not enough to show what they really have to date. It seems they always seem to start from scratch and do not seem to have stamina to go the distance. Trying to outsmart the cable companies is not a good idea, buying a few of them might!. Intel has the means but does it have the WILL to do it. All things to date do not indicate so. Intel could do a completely nice piece of hardware with software tuners to record 10 channels if you so wish, provided you have a NAS to store these and if done in some proprietary format that PCs cannot decrypt then they would have a form of copy-protection. They need to show rather than say this and not seem to do it. Their STB was promising and it seems to have faded over the years ...

    As for content packaging, there is a lack of head-end system/solution that can give any combination and any duration on an almost realtime basis. If there is one, they will offer it. Here is a chance to provide a content provisioning system with gated delivery that Intel could so. If more of that can be dump into hardware chips, then good. Most IPTV solutions have a limited provisioning system to offer packages, so that limits what they can offer.
    Reply
  • JeBarr - Friday, February 15, 2013 - link

    Keep dreaming.

    Idea ownership will prevent it.

    While I will agree that old business model of content distribution and big players in entertainment industries need major changes for the dream to be realized, the fundamental causes are deeper than most would be willing to admit to.

    Everyone involved is paying room full of lawyers to kill your dream and mine.

    The revolution required to bring about such a change comes with a high cost. Too high for most.
    Reply
  • chaoticlusts - Friday, February 15, 2013 - link

    This sounds brilliant, although I don't think I'll be seeing it where I live (Australia). Hell I'd love to sign up for netflix/hulu plus but they won't let me without running a proxy service, granted that's gotten easier in the past year but it leaves you in this odd situation of hacking a service to give them money because they can't sell it too you directly which obviously means a lot of people simply opt to pirate (You hear a lot of 'well if they don't want our business...')

    But yes if this service launched in Aus for a price like you talked about on the final page I'd happily sign up, however that would mean Intel had sorted out the licencing nightmare we have over here which I'm not optimistic about. I'd definitely want some way to locally store things I watched even if that required tying it into some odd DRM so that if there was a licencing dispute between Intel and the production company they could remove stored content, however only if they were selling it as a purely 'streaming' service and any local content was purely 'cached'. Saving in bandwidth via something like that would be a huge selling point.
    Reply
  • teiglin - Friday, February 15, 2013 - link

    Before I add my 2c, I just want to make a request for you to stop contributing to the widespread misuse of the phrase "to beg the question"--it's actually a rhetorical fallacy in which an argument for a point uses that point as an assumption. What you mean when you wonder whether Intel's cash is behind the issue is that it *raises* several questions; it does not beg them.

    Grammar pedantry aside, I haven't had cable since 2005 when I finished college. My folks still have it and pay somewhere just shy of $200 to Time Warner for a internet, a handful of premium channels (HBO and Showtime I think) as well as maybe a digital sports add-on package. To me, that's just highway robbery, as I have no time filling the my fairly-limited TV time with free content either over the air or on the internet. The few shows I watch regularly are available for free on the internet, and viewing beyond that is easily satisfied with the occasional season/series purchase either of optical discs (which promptly get ripped) or from Amazon (I'm not a Prime subscriber though it's tempting); these purchase options are particularly effective for my five year-old son, who is able to watch a given show many, many times without tiring of it. I've considered Netflix but we just don't have enough time to spend in front of the TV to really make it worth it.

    I'd probably be willing to pay on the order of $20-30 a month to get the 2-5 shows I'm interested in at any given time, if they are a) downloadable, and b) available in legitimately high quality--say 12Mbps x.264 at a baseline. Given that mechanical storage is finally more or less recovered from the Thai floods (say $.04/GB? haven't actually bought a hard drive since 2010), there's no reason not to devote disk space on an HTPC or other NAS to improve seeking performance and general convenience. There's really no reason to be forced to suffer buffering on a paid service, and this is one of the primary things that keeps me away from current services like Hulu Plus and Netflix. I frankly don't hold out any hope that content providers will ever allow this, though I don't see how offering legitimate downloads can do anything but reduce piracy at this point. Not having an official download available certainly doesn't seem to have stemmed piracy, in any case.

    The final thing I'll add is that there is one more viewing paradigm that is relevant to my household, if not to me personally, and that is actual live TV viewing. My wife likes to just have the TV on, especially for the morning shows, but this is perfectly well-satisfied with the already-hooked-up antenna, so it doesn't factor into the cost equation.
    Reply
  • tat tvam asi - Friday, February 15, 2013 - link

    John McCain and Kevin Martin's initiative to pry open and unbundle the channels
    <a href="http://www.anandtech.com/Comment/NewComment/6748?p... served a la carte</a>
    Reply
  • tat tvam asi - Friday, February 15, 2013 - link

    correct link:
    http://www.mccain.senate.gov/public/index.cfm?Fuse...
    Reply

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