Intel has been working on a new internet based television service like a number of other multinational technology companies. Originally anticipated by the end of 2012, there was some expectation that it would be unveiled at the Consumer Electronics Show in Las Vegas. However, there are reports that it may be hitting similar problems in licensing programming that have faced other technology giants. The concept of a virtual cable operator, delivered over broadband with a national footprint, is attractive but incumbent service providers still control the network access.
Intel appointed Erik Huggers from the BBC, to head its television initiative in 2011. The Intel Media division has been run like a startup but with significant funding. It has been working with a team of designers in London.
The plan is apparently to create a virtual cable operator, offering services over the internet, accessible through a set-top box with Intel chips inside. However, without much media experience, Intel undoubtedly faces a considerable challenge in breaking into the television industry.
The early efforts to launch Intel Viiv as a technology based media platform failed to excite the market. Intel then partnered with Google to support its internet television ambitions, but following the disappointing launch of the initial Google TV platform, Google switched to ARM-based chips, as did many others.
Sony is also understood to be working on a separate plan to wrap up programming deals to create a virtual network. Sony has a broad range of media interests and already has a distribution footprint through its PlayStation Network and network connected televisions and disc players. The Japanese corporation has been struggling to compete with South Korean rivals Samsung and LG. Offering television services across its entertainment devices could provide a point of differentiation.
Apple is also widely expected to enter the market. It chief executive Tim Cook has admitted that television is “an area of intense interest,” suggesting that it the current Apple TV may become more than a “hobby” in the future, even if it has become a “beloved hobby”. Apple has the advantage of an ecosystem of smart phones and tablets that defined their categories and a track record of thinking outside the box to deliver an integrated user experience.
Technology companies like Microsoft, Apple, Google and now Intel have long had an eye on the living room screen but so far it has proved difficult for them to disrupt the traditional television industry than they might have imagined.
The problem is that the major media companies are reluctant to do deals with internet television services, concerned that they could undermine the current lucrative distribution ecosystem. In particular, they are generally opposed to an à la carte model rather than the bundled buffet service that has proved to be the mainstay of the pay-television industry.
In any case, it is questionable whether it would work out any cheaper for consumers, much as they may resent the increasing cost of their current communications and entertainment services. The à la carte option inevitably works out more expensive than the fixed menu.