Can Intel conquer TV?

In late December of 2012, Forbes magazine reported on giant chipmaker Intel's secret plan to take over television. Too ambitious? Not if it works.

Intel has been working on set-top box that goes Apple TV, Roku and Microsoft Mediaroom many times better. It would:

"... offer cable channels delivered "over the top" to televisions anywhere there is an Internet connection regardless of provider... For the first time, consumers will be able to subscribe to content per channel, unlike bundled cable services, and you may also be able to subscribe per show as well." In addition, "Intel plans to give customers the ability to use 'Cloud DVR', a feature intended to allow users to watch any past TV show at any time, without the need to record it ahead of time, pause live TV, and rewind shows in progress."

For those of us who need to use five different remotes just to access a portion of these services, Intel's technology sounds like a dream. Unfortunately, there's still a chance it will remain one.

Despite Intel's experience of investing billions on chip design, the company needs to spend at least that to placate the existing owners of the content - Hollywood and the cable companies.

Two days after New Year, The Wall Street Journal reported that Intel had indeed run into licensing delays and its plans to begin service at the end of 2012 were postponed. In fact, Intel didn't even unveil the box at the annual Consumer Electronics Show in Las Vegas.

Because Intel is looking to bypass the usual entertainment industry practice of bundling channels, "Persuading companies to license individual channels would require far higher fees than the companies currently receive, this executive said, noting that his company and Intel were far from reaching an agreement on financial terms."

The barrier Intel faces is not minor. On the one hand it could give consumers things they've been asking for, futilely - for decades: freedom from the restricted and overpriced cable bundle and the right to pay just for the channels or programs they want to watch. On the other, Intel could destroy the cable model. In short, cable is, or believes it is, fighting for its life. Cable still has plenty of clout and program distributors won't deal with Intel because they don't want to risk antagonizing their main conduit: cable companies.

"One executive at a big TV company said last month that he didn't want to be among the first to negotiate a deal with Intel for fear of disrupting his relationship with existing distributors," said the Journal.

There are already plenty of skeptics - despite Intel's success record and incredibly deep pockets. But Intel has been a dominant tech company for 30 years, and have overcome many technical and business problems, so there's a good chance they may yet succeed in dominating our TVs as well. Stay tuned.

Why Intel's New IPTV Service Will Do What Google, Apple, and Microsoft Can't (Forbes, Dec. 30, 2012)

Intel's Push Into Web TV Hits Delays (Wall Street Journal, Jan. 3, 2013)