Intel who spent last week launching blisteringly fast processors for Ultrabooks in Australia, is now trying to get into the TV business with the chip company tipped to launch a TV set top box at the 2013 CES show in Las Vegas.The traditional processor company is banking on the raw processing speed from their processors to deliver a new TV experience, where advertising is delivered depending on who is sitting in front of the TV.
Intel has been splashing cash around lately in an effort to get both consumers and business to buy their Ultrabooks, and now wants to move to the other side of the media fence with a new virtual television service that will compete with the free to air TV networks and IPTV operators who are looking to deliver targeted advertising based on gender.
Intel believes that they can deliver a processor platform for TV manufacturers and PC makers looking to get into the lucrative TV business.
During the past 12 months Intel has quietly hired a team of veteran entertainment dealmakers to win over Hollywood studios and global content creators. Both Samsung and LG already have Intel Dual core processors built into their TVs and it’s tipped that Apple plans to use Intel processor technology in their new TV.
Bloomberg-owned BusinessWeek claims that five sources who have been negotiating with Intel for months. The company is emphasizing a set-top box employing Intel technology that can distinguish who is watching, potentially allowing Intel to target advertising.
Early in 2011 when Google was struggling to launch their Google TV offering Intel announced they were cutting back on their chipsets for “smart” TVs after the Google TV debacle.
However insiders are now saying that the Company has been quietly working away on a TV offering both directly and in partnership with brands like Apple, LG and Samsung.
While they were announcing an exit from Smart TV technology the processor Company formed the Intel Media business group who had a mandate to try and get access to digital content for Intel-based platforms.
Intel has had a chequered history in the consumer electronics market. Back in 2004 I remember attending an Intel launch for their digital home. Intel’s digital home vision consists of interoperable devices in the home that were capable of sharing digital media across a home network.
The ultimate goal at the time was to enable consumers to access digital content from any device, anytime and anywhere, both inside the home and on-the-go.
This is now a reality with TVs talking to smartphones and PCs being used as a content hub.
Now Intel wants to move further into the home with a set-top box that is able to capture data about viewers’ gender or whether they’re adults or children to help target advertising, two sources said.
Intel believes they can compete with brands like Foxtel and Telstra in the delivery of content into the home. Its unlock key is a set top box that delivers over-the-top subscription services to consumers including the delivery of music and movies along with TV programs.
BusinessWeek said that a successful Intel TV service showcasing Intel technology could be a big step towards making its chips prevalent in more living room devices.
“If they can create a virtual network and it incorporates proprietary Intel technology, they could certainly bring something different to the subscription TV model,” said JMP analyst Alex Gauna.
Intel’s offering aims to exploit one of the TV industry’s major issues: the reliability, or lack thereof, of Nielsen ratings data on audiences. Nielsen has long been the dominant provider of TV ratings, but the accuracy of its data has come under attack by some network programmers, who argue that its polling system of 50,000 homes is antiquated for the digital age.
Intel is already talking to advertising agencies and media buyers about the new box which they claim is superior to what is being offered by brands like Topfield, Beyondwiz and Humax, because of its new interactive features which add greater value to TV advertising and help offset reduced revenue from licensing fees for network owners.
“They’ve told us the technology is going to be so much more interactive with ads that you can make more money. But it’s just a little unproven,” said one executive who has been involved in the talks.
Intel believes they can appease Hollywood studio concerns about content being copied via their own TV chip technology which makes it easier to protect content streamed to computers.
According to a company source, ensuring that its chips become prevalent in home entertainment devices would be the driving reason behind any Internet TV service it launches.
According to Reuters, the biggest problem Intel faces is its inability to reach deals with major content providers, which are reluctant to license their networks and TV shows at rates that could undercut their current partners.
TV network owners won’t agree to small content bundles without being paid a premium for the channels they choose to license.
To overcome this issue Intel has assembled a team of television industry veterans well-schooled in negotiating distribution deals said Reuters. Leading the group as head of Intel Media is Erik Huggers, who worked on media at Microsoft before going to the BBC. Huggers enlisted as an adviser Garth Ancier, who most recently served as president for BBC Worldwide America and before that worked at NBC, FOX, and Disney.
Underscoring the difficulty insurgent tech companies face in securing content, Microsoft in January indefinitely postponed plans for its own online TV subscription service after deciding that licensing costs were too high, according to people familiar with those discussions.
Even if Intel delivers a stunning chipset and a box that is beyond all other the killer is content and this is where Intel will struggle. They will have a problem with partners like Google, Apple, Samsung and LG as all these hardware companies are looking to get into the media business in their own right said an analyst at DisplaySearch.