Intel’s launch of an over-the-top TV service that would compete with cable and satellite giants will be delayed until 2014, as the chipmaker scrambles to find partners to help it come to market, according to an industry source familiar with Intel’s strategy.
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.
Intel has approached several potential partners with sizable Internet-video distribution platforms, including some broadband providers, according to a source. The company declined to comment.
Netflix is among the potential partners Intel has approached, 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.
Word that Intel was seeking partners to launch its over-the-top rival to cable and satellite TV was reported Thursday by AllThingsD and Bloomberg. A source confirmed that Intel is looking for “prospective partners which have synergies.”
Intel has been in talks with Amazon and Samsung Electronics about pacting for the service, dubbed OnCue, according to AllThingsD.
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.
Pay TV providers have long been skeptical that Intel, or anyone else, can assemble programming rights and achieve scale to take on cable and satcaster giants. Sony and Google also are reportedly cooking up cable TV competitors.
The challenges for new entrants into the pay TV market are significant. The biz is already highly competitive — and in the U.S., aggregate subscriber numbers have started to decline. Meanwhile, Intel and other over-the-top players would be relying on the broadband pipes of cable and telco companies, and an OTT service would be hard pressed to offer a notable price advantage over existing pay TV services.
To date, Intel hasn’t yet nailed down a programming pact with a major media company. The company would have to higher per-subscriber rates for such deals, and if programmers cut distribution deals with an over-the-top partner they would have to extend the same terms to existing cable and satellite partners.