Intel’s a la Carte TV Plans Are Still Slow-Going

Intel has joined the club of tech companies who want to revolutionize television, but unsurprisingly it's meeting some resistance in Hollywood.

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Reuters

Intel has joined the club of tech companies who want to revolutionize television, but unsurprisingly it’s meeting some resistance in Hollywood.

According to Forbes, Intel wants to launch an Internet-based TV service that would do away with the typical big bundle of channels that you get with cable or satellite TV. Instead, subscribers would have an à la carte selection of only the channels they actually want, streaming to any device with an Internet connection. A beta could roll out as early as March, the report claims.

However, a later story by the Wall Street Journal dumps some cold water on Forbes‘ report, saying that content providers aren’t all eager to disrupt the lucrative cable and satellite TV business. Hollywood companies would want a lot more money than they get through those services, and it’s not clear how many content deals Intel has landed so far. The Journal described launch timing as “uncertain,” citing one source who guessed at a mid-2013 launch, and another who said it could happen by the fourth quarter of this year.

Intel is reportedly trying to solve an age-old gripe with cable TV: With the typical subscription, companies like Viacom and Disney earn anywhere from a few cents to several dollars per subscriber for each channel they offer, regardless of whether you watch them or not. In a way, this system works, because popular channels help to buoy more obscure stuff. But if you’re not someone who watches, say, a lot of sports, you’re probably getting ripped off, as The Atlantic recently noted. Paying by the channel could be a better alternative than relying on a patchwork of web video services like Netflix and Hulu.

Still, if you follow the tech industry, this all might seem familiar, and not in a good way. Apple has also reportedly tried to break up the bundled cable business, but seems to face rejection at every turn from an industry that would rather not rock the boat. It’s hard to see exactly why Intel would be more successful.

Forbes‘ report says Intel is willing to invest more money in chip design than Apple or other tech companies, and that its dedication helped it negotiate content licensing deals with Hollywood. But keep in mind that Apple CEO Tim Cook now views television as “an area of intense interest,” and the company does have tens of billions of dollars in cash on hand. Apple clearly has the resources and the will to enter the television business in earnest. Convincing Hollywood that a different kind of TV service won’t kill their business has always been the issue.

In the end, that may just take time. Although cord-cutting hasn’t destroyed cable and satellite television overnight, it is a real, growing phenomenon. An Internet-based alternative, which would appeal mainly to people who watch shows on their phones, tablets, laptops and streaming video boxes, could be a way for Hollywood to address that market without killing cable and satellite television overnight. Eventually, it’ll make sense for content providers to pull the trigger. As for when, that still seems to be anybody’s guess.

1 comments
NoblesseOblige
NoblesseOblige

This change is not viable until advertisers realize that cable companies and market researchers have been lying about subscribers and viewership respectively, for years now. It's not enough that cable and satellite providers have lost half of their subscribers because they are able to fool advertisers into paying as if they were still around.  Once advertisers realize that online advertising reaches a much wider audience at a lesser cost, only then will content providers be forced to alter their distribution strategy to an a la carte system. The real question is how long this will take and wether the end result will be an a la carte system under one banner or the content providers directly broadcasting their own channels through their own subscription services.