Intel's next plan to shift in Web-based TV Industry

Intel Corp. (INTC), shifting strategy for its planned Web-based television service, is now seeking partnerships to jumpstart the project, said a person with knowledge of the situation. Erik Huggers, the executive leading Intel's TV business.

Earlier this year, news broke that Intel - the company known for making chips for computers - was cooking up an ambitious project to blow up the pay-TV business as we know it.
Intel hired 300 people and reportedly invested $100 million in Intel Media, which was going to be an Internet-based alternative to cable, fiber, and satellite television.

Intel, based in Santa Clara, California, is looking for a partner with a base of Internet subscribers or rights to films and television shows.The new CEO, who took the reins in May, has emphasized getting Intel chips into mobile devices. The shift in strategy for its TV effort reflects a view within Intel that the company, which has built an advanced set-top box, needs a partner with existing customers and marketing experience to make it a success.

“For Intel or anyone else to launch and pay the networks what they’re getting from the cable companies makes it a very difficult proposition,” said Bernard Gershon, a New York-based digital television consultant.

Intel built its own cable box. It built its own software. It was planning on including a DVR that recorded everything over a 3-day period so a consumer never missed a minute of TV. People who got an early look at the box, and its software, were blown away.

Originally, Intel Media, the division headed by former BBC exec Erik Huggers, planned to debut the Internet TV service by the 2013 holiday shopping season. But at this point, the launch will have to be pushed to 2014 — and the initiative is in danger of getting mothballed if Intel can’t arrive at a workable solution.

Netflix is among the potential partners Intel has approached, with the chip company hoping to gain traction quickly by teaming with companies that have sizable Internet-video distribution platforms, according to a source.

However, Intel and Netflix never held serious discussions about a partnership, according to another source close to the situation. Netflix execs have consistently disavowed any interest in creating a service that would try to compete with traditional cable and satellite TV.

In addition, the chipmaker hoped to line up a partnership with John Malone’s Liberty Media or its international cable operator unit, Liberty Global, that would involve financial backing, Multichannel News reported. But Liberty had “zero interest” in a deal, according to the report.

The deck has always been stacked against Intel in its ambitious — some would say quixotic — plan to take on entrenched cable and satellite TV services. That Intel is casting about for help to create the Internet-delivered television shows that realizing the vision was much tougher than the company anticipated.

Source :- Bloomberg, BusinessInsider, Variety