Anand's Thoughts on Intel's TV Initiative
by Anand Lal Shimpi on February 14, 2013 4:21 PM ESTThe Backstory: Why Get into the TV Business?
Erik presented his plans and got funding from mother Intel on December 8, 2011. In less than 12 months the Intel Media team had built all of the pieces of the puzzle. They'd built the streaming device, the OS, the web services infrastructure, the video infrastructure, everything. Erik told me that he'd never seen an organization move that fast in his career. To the objective outsider, this either means that Intel is putting a ton of support (think: cash) behind this project, or it's going to be half baked. Based on some of my own snooping, I don't think it's the latter. Which then begs the question, why was Intel so eager to go off and build an IPTV service and do all of this work? And why did it have to happen so quickly?
I didn't ask Erik the first question, although I think the answer is obvious. Intel's present success is very closely tied to the PC industry. It's trying to break into the established ARM smartphone and tablet industries to help go where the industry goes, but it does so as a late comer and is currently enjoying all of the struggles associated with that. The TV industry however hasn't really been revolutionized, and it's ripe for change.
The Boxee Box, one of many Intel powered solutions for the TV
We've seen high profile attempts to empower the big screen with devices like the Apple TV or Google TV. Smaller players have made similar attempts (e.g. Boxee Box, Roku). All of these boxes attempt to stream existing cloud based content to your TV, but they don't fundamentally replace a cable TV subscription. For some users, the content you can currently get on any one of these platforms is good enough to augment a cable TV subscription, while for others it's good enough to cut the cord entirely. For cord cutters, the gaps in content that remain are filled by content owner websites (e.g. southparkstudios.com) or through piracy. None of the existing platforms offer a universal solution for live TV either, you sort of have to hope that whoever is broadcasting whatever you want to watch in real time is kind enough to stream it - or you have to wait and watch it later.
The TV market today looks a lot like the smartphone market did not too long ago. There are established players, but no one is really doing it perfectly. There are good ideas, but no platform that unifies them all. Intel is interested in the TV market because it is a consumer facing business that's detached from the PC industry, and one that's ready for a revolution. Getting in early and generating revenue that's detached from PCs would help Intel grow its revenue base, diversify a bit and likely keep investors quite happy. The side benefits are obvious. Any solution here would need a fairly heavy cloud platform to drive it (you have to store, transcode and stream all of that content), plus if you really do pull off a good internet based TV strategy it simply drives usage of all other computing devices as you'd want to be able to stream/consume content on as many different screens as possible.
The "why do it?" question is an easy one to answer, but figuring out whether or not Intel can do it is a different one entirely. Intel certainly has the cash to pull off a dramatic play in the TV space. It also has the ability to customize silicon to put fears to rest of its TV solution being a giant pirate box. However, Intel hasn't traditionally done well in the consumer facing software/services department.
Intel does a great job of building fast silicon, validating it and optimizing software for it, but when was the last time you saw Intel build a gorgeous UI? Even Intel's reference Ultrabooks don't really ooze confidence that the company knows how to build a real consumer device, software, service or experience. The skepticism here is understandable and warranted.
The only solace Intel can offer to the skeptics is the fact that Intel Media is staffed by a combination of Intel insiders as well as from others outside of the company. Erik naturally stressed hiring from Google, Apple and Netflix. Erik himself came from the BBC and admittedly isn't much of a chip-head to begin with. The proof will be in the pudding. Intel hasn't publicly demonstrated anything, it hasn't announced pricing or a channel lineup. With a product launch sometime in 2013, we won't have to wait long to see how this plays out.
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Conficio - Sunday, February 17, 2013 - link
For anything than news and live events, such as sports, etc. There is no reason for any IPTC channels and line up. With hundreds or even thousands of channels to choose from it is useless to have any 24/7 program that includes a few highlights and a lot of filler.What really needs to happen is build a platform that can monetize a movie/show/episode per view ideally on an egalitarian price (99 cents per hour?). Remember how iTunes made the turn around for digital online music that was not pirated? It made it because it simplified the price question. One song, a buck? Yes, any song the same price! I'll always spend a dollar for a song. The same must be working on an hour of entertainment. Movies in the theater, cost mostly the same, even if they are of different length, quality of fame of cast/director. Make the online consumption the same simple price model and allow a rewind of the same show within 30 days w/o paying again (or make that lifetime).
I can't tell you what the right price/h is but an equal price is right. May be two prices, one with advertisement, one w/o. The producers will make more money with popular shows and each show becomes its own franchise, which does nto need to live next to duds in a 24/7 lineup.
Anything short of that is meh!
lopri - Sunday, February 17, 2013 - link
But I never understood the concept of Netflix or whatever media box (Yuku?). I still don't know what they exactly do, other than maybe the let you rent movies or shows that they have in their library.Can one watch, say, American Idol real-time and cast her/his votes with these devices?
Can you watch Rachel Maddow show real-time? I mean, it's a daily news show. You don't watch a day's news the next day.
Can kids watch Sunday morning shows or Saturday morning cartoons?
Can you watch Super Bowl or baseball games live?
What about Academy awards or some such?
Can one do all of the above after "cutting the cord"? This is a genuine question because I have never paid attention to this type of devices.
losttsol - Monday, February 18, 2013 - link
Dear Intel,I'll take ESPN and Discovery Channel. My wife wants Bravo and E. I'll OTA my local channels. The cable company can choke on the rest. Make it happen. Thanks.
jackoatmon - Monday, February 18, 2013 - link
Someone needs to make a device. A fully integrated solution with a content backend. Think Netflix with way more concurrent selection as an interface on a clean device that you get on a subsidized contract model like a phone.It would be iPhone for TV.
Just plug it in and kabam.
Of course we all know this is exactly what it needs to be and it is beyond question that this is what it will be. It's just a question of how long it will take Apple to make - it or someone else to wake the fuck up for once and smell the coffee and pick the low hanging fruit.
jameskatt - Tuesday, February 19, 2013 - link
The biggest problem for Intel is getting the content from the studios. Sure, Intel can get the same content as Netflix. But if it is going to get first-run, original, and new content, it will have to negotiate with the studios for it.The biggest impediment to getting content from the studios is that CableTV Companies - such as Comcast - pay the studios BILLIONS of dollars for new content. When TV shows go into syndication, the studios expect to make BILLIONS of dollars for their product. An CableTV Companies are ready and WILLING to pay them the big bucks. After all, it is the high cost of cableTV that pays for this content.
The problem is, Intel wants to give the studios PENNIES ON THE DOLLAR for their content. This is simply not going to fly. If the studios approve of this, then CableTV Companies are going to yell and scream and demand a similar deal. Studios are going to LOSE BILLIONS OF DOLLARS in revenue. Thus, this will NEVER happen. The only low cost content we will get is the old content or near worthless content.
The next big impediment is that the CableTV Companies are themselves producers of content. Comcast - for example - owns NBC and Universal Studios. Why would Comcast want to shoot its profits in the foot by agreeing to a lowball deal? It won't.
The third big impediment is that The CableTV Companies nearly own the entire ecosystem for TV. They provide the Cable, the Internet, the Phone lines. They provide the Cable TV Box and DVR. They provide the CableTV software. They provider the iPad app for streaming. Some like Comcast even create the content. The only thing the consumer has to provide is the television. Thus, why would any CableTV company want to let anyone into their ecosystem? They won't. And they strongly compete. And they have the money - more than Intel has to compete in this arena.
Intel will fail as others have failed before it. Intel's only incentive is to sell its hardware. But it won't be able to differentiate its product from its competitors so long as it will pay pennies on the dollar for the content.
SleepyItes - Wednesday, February 20, 2013 - link
As with many people here, I am pessimistic about the ability for Intel to overcome the dominant influence of Cable ISP localized monopolies such as Comcast and Time Warner. These companies use their vast profits from their high-speed internet customers to ensure that they enjoy a similar lack of competition in the TV content space for as long as it is profitable. If you pay for cable internet (as I reluctantly do as there is no other option in my area), you are supporting their cause.The solution must come from a variety of sources, such as heavy government regulation of the existing Cable ISP infrastructure, encouragement of regulated competition via subsidization for laying new infrastructure (as Google has started to pick up where Verizon FiOS left off), and content producers who are willing to stand up to the big cable companies and network conglomerates, and provide their content directly to consumers via web based services. Netflix has shown it can be done with House of Cards (and to be fair there have been other successful web series), and now I think others need to follow suit. AMC Networks, HBO and Showtime are some of the best positioned content owners/producers to do this (I still can't believe that you can't subscribe to an online-only HBO or Showtime account).
Even though my wife hasn't let me cut the (Satellite) cord yet, the future is clearly headed toward a more sophisticated content delivery system than Cable or Satellite TV can offer in their current state. I hope that Intel can manage it without putting more consumer money in the pockets of Comcast and Time Warner.
/ispmonopolyrant
Now, to Anand's initial request:
I think a tiered or a la carte service cost of $20-$50 per month is reasonable for most families, if this truly fills the "live cable and DVR" gap. Getting the equipment for free/cheap (multiple rooms) with a two year service contract also seems more enticing than buying it outright, but I would be open to either option.
I would expect at least the equivalent of a HD DVR, but the idea of being able to stream live/recent shows from the cloud is much better, and could seal the deal, as long as you can still fast-forward through the commercials. I would also like to see the ability to play most, if not all, content on my iPad (at least when I am on my home network). DirecTV has this and I absolutely love it. It would also be nice if the devices on the same network talked to each other, so you could pause in one room and resume in another (another feature of DirecTV that I like).
Personally, I would prefer a package that included major networks (NBC, FOX, ABC, etc.) along with 10 or so cable channels such as HGTV, DIY, Food, Bravo, AMC, IFC, FX, BBC, Comedy Central, and Cartoon Network, plus at least the ability to watch local (SF Bay Area) sports. It would be really great if you could add/remove channels or shows on a whim (e.g. During the World Cup).
I really look forward to seeing who ends up pulling ahead in the TV content delivery wars, and I really hope that it is done in the best interests of consumers.
ENCOM OS-12 - Tuesday, March 5, 2013 - link
I work on the purchasing side of the TV business for a major retailer and feel well informed about the TV business in general. I've worked directly with almost every major TV manufacturer and have been along for the ride with Intel's attempts at entering the TV business both through direct contact with them as well as various manufacturer partnering attempts. AnandTech has always been one of my favorite resources for up to date industry & tech information so I believe you are also well informed when it comes to speculating about Intel's next step. My only addition is that 4K will be arriving later this year and the content delivery concerns were often speculated to be downloadable content. I would think Intel would plant a focus here with regards to future TV models in the near term. Thank you Anand & staff for the many years of great articles and the significant knowledge I have gained from them in selecting PC related products in the past and even televisions today for our customers. Keep up the great work!