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Intel’s online pay-TV, which was announced last year, has already been dismissed by many as another ho-hum attempt by Intel to break into the consumer electronics market.  Not only would Intel have to compete with monopoly-like cable operators, like Comcast and DirecTV, but it would also have to make some substantial content deals that are attractive to consumers.

Apple, Google and Microsoft have tried and failed to convince Time Warner, NBC Universal and Viacom to license their TV shows and movies in a way that would give Internet TV a fighting chance.  But Intel is reportedly making headway.

According to  Bloomberg News, Intel is making progress in talks with Time Warner, NBC Universal and Viacom to obtain TV shows and films for a first-of-its kind online pay-TV service.  The chipmaker also reportedly about to begin financial negotiations with News Corp., owner of the Fox film and TV businesses, and is in preliminary discussions with Walt Disney and CBS.

If Intel does make content deals with these companies, Intel would still have to offer an attractive price structure for consumers.  If you thought they would be the first TV service to offer a la carte pricing, think again.

Eric Huggers, Intel’s vice president for media, said in a media conference last month, “what consumers want is choice, control, and convenience,” Huggers said. “If bundles are bundled right, there’s real value in that…. I don’t believe the industry is ready for pure a la carte.”

So the a la carte option is off the table.

So how is this different than what Comcast offers?  Intel plans to offer its own set-top box with an easier-to-use programming guide powered by an Intel chip that will come with a camera that can detect who is in front of the TV.  Huggers told Bloomberg News that Intel wants to create a more flexible service that gives subscribers more choices over the channels they receive with live channels, on-demand programming, and a cloud-based virtual DVR.  The company eventually wants to offer services on tablets, mobile phones, and computers.

A service that offers live channels and on-demand programming on a set-top box with a camera just seems like a glorified cable box to me.  And if a la carte pricing is off the table, consumers will need a little more incentive to switch over from their current provider.  If consumers want a choice other than cable they have plenty:  Apple TV, Boxee, Roku, and the list goes on. While those devices haven’t broken into the live TV programming deals that Intel is attempting, they do give consumers access to a library of streaming services like Netflix and Hulu, plus the option to buy and rent movies and TV shows.

Intel doesn’t exactly have a successful history in TV.  While it was early to push Google TVs and other smart TVs, with its processors powering a Sony Google TV and a Logitech Google TV set-top box, the products failed.  As a result, Intel shuttered its TV business in late 2011.

The only company that could really revolutionize TV is Apple.  Apple is reportedly working on a TV that could be ready by year-end.  Now that might shake things up.


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