The deal positions Verizon to become a player in a new market for pay TV where channels are transmitted over the Internet. Intel had hoped to move in to that emerging platform — it has a lot invested in the set-top boxes its OnCue service would use — but was unable to secure licensing rights for popular services at competitive prices. Intel was believed to want $500M for its platform, but the companies didn’t offer financial terms for the widely anticipated deal, expected to close by the end of March. Verizon CEO Lowell McAdam says that it “provides us with the capabilities to build a powerful, capitally efficient engine for future growth and innovation.” The company adds that it expects to “integrate [Internet protocol]-based TV services with FiOS video to further differentiate FiOS from traditional cable TV offerings and to reduce ongoing deployment costs.” In addition, the company will integrate the service with its wireless 4G LTE network. It will keep the current OnCue management team in place and offer jobs to “substantially all of the approximately 350-person Intel unit” which will stay in Santa Clara, CA. Intel CEO Brian Krzanich says that with the sale his company can further align our focus and resources around our broad computing product portfolio in segments ranging from the Internet-of-Things to data centers.”
Related: Verizon Beats Q4 Earnings … Read More »
Intel CEO Brian Krzanich made the most of his first appearance as International CES‘ lead keynote speaker — the gee-whiz presentation. Saying that we’re entering “a new era of computing,” he introduced several intriguing devices that he promised will all be available this year. He also brought up DreamWorks Animation CEO Jeffrey Katzenberg to talk up the value of enhanced computing power for moviemaking. But most significantly, he announced that Intel’s new processors will no longer include minerals from mines in the Congo that have been at the center of fighting there that has resulted in millions of deaths, making it the deadliest war since World War II. “Every microprocessor will be conflict-free,” he says. Read More »
When many studios license shows to Netflix they stipulate that the content can’t be distributed in the U.S. through a pay TV operator’s set top box — but that should change, TiVo CEO Tom Rogers told analysts today. Netflix “has clearly risen to the level of a must-have” for consumers who want streamed video. And once Netflix can negotiate changes in its contracts “increasingly we’re hearing operators wanting to include Netflix in their distribution” after years of considering it a threat. It would benefit TiVo if he’s right: Its DVRs can integrate broadband video with conventional cable channels. In September, UK cable operator Virgin Media said that it would include a Netflix app on the TiVo boxes it offers to some of its subscribers – blurring the distinction between the online service and premium channels like HBO. Rogers naturally wants more U.S. cable operators to let TiVo handle their advanced services. Cable “is beginning to pay a price for not having found the right balance [between marketing broadband and video] and not highlighting how video benefits flow from broadband connectivity.” Smaller operators have turned to TiVo while big companies such as Time Warner Cable haven’t. But Rogers says that he doesn’t “see it being sustainable that somebody in suburban Anchorage, Alaska, can have a vastly better advanced television experience than somebody in the media capital of the world living on Park Avenue and 60th Street.” Read More »
The wheels are in motion for that to happen, Bloomberg reports. Intel wants about $500M for OnCue, its ambitious initiative to offer a cable-like service via the Web. Samsung and Liberty Global have kicked the tires. But Verizon‘s said to be already out talking to broadcast and cable channels about possible carriage terms, according to the news service’s unnamed sources. The big question: Would Verizon need new contracts for an online service, or could it just tweak the current programming agreements that apply to territories where it offers FiOS TV? If Verizon proceeds, then it theoretically could compete with cable and satellite companies across the country. Before Intel decided to unload OnCue, it hoped to create a subscription service that would work with its own interactive set top boxes. But it was unable to persuade network owners to let it provide individual channels — not just the bundles offered by cable and satellite — even though it offered a premium over the fees that conventional distributors pay. Some programmers privately doubted that Intel could guarantee them a quality signal over the Internet, and noted that Nielsen initially wouldn’t be able to measure viewership via its non-traditional set top boxes.
Intel is reportedly making headway on its plan to offer live and 7-day catch-up viewing over the net to people who buy its set-top streaming device. The chipmaker’s planned online pay-TV service was outlined by Intel Media corporate VP Erik Huggers in February, who said “We can bring an incredible television experience via the Internet to consumers” where live and catch-up TV “all live in the same paradigm” created by the networks themselves. There’s still no word on what channels will be available, how much they’ll cost, the name of the service or precisely when it will be available, but Bloomberg sources say that progress has been made on deals for TV shows in talks with Time Warner, NBC Universal and Viacom. The company is also about to start financial negotiations with News Corp., Bloomberg said. Intel is betting its service, provided via customers’ broadband accounts, will give subscribers more choice. Huggers said last month, “It is a quality play. We will create a superior experience.” RBC Capital analyst David Bank told Bloomberg that the new service would be “great” for media companies. “Intel will have to pay a premium as the new kid on the block.”
The chipmaker will offer live and 7-day catch-up viewing over the net sometime this year to people who buy an Intel streaming device. But this isn’t about receiving cable channels a la carte — or even saving consumers money. “It’s not a value play,” Intel Media corporate VP Erik Huggers said at All Things D’s “D: Dive Into Media” confab. “It is a quality play. We will create a superior experience.” No word about what channels will be available, how much they’ll cost, the name of the service, or precisely when it will be available. But “we will create new bundles,” he says. “We can bring an incredible television experience via the Internet to consumers” where live and catch-up TV “all live in the same paradigm” created by the networks themselves. Intel’s device will include a camera so it can detect who’s watching, and come up with personalized viewing recommendations. The company has been talking to content providers for the last year or so about possible opportunities to offer their programming apart from a cable or satellite subscription. Executives and analysts for the most part have scoffed at the idea that major players would agree to let Intel undermine the highly lucrative pay TV ecosystem.