Mixed Signals

Intel TV: Coming To A (Lot of) Video Screen(s) Near You?

5/10/2013 6:33 PM

Frankly, I am intrigued, and much more in a positive than a negative way, about the announcement of and early information of Intel TV.

At this point in telecom history, Intel is the traditional telecom company, with a solid, 60+ year background of performance and development, almost all of it on the hardware/chip side. Thus, for it to be risking what could be a big failure (witness, in part, AppleTV, thus far), based upon what apparently is a big bet on the future of video distribution, is a big deal in my eyes.

That speaks to commitment, and very likely a very good plan and technology.

Also likely, much of the pressure for success will turn now on the execution (assuming the plan and technology work well). Further, because Intel TV does not have a telecom legacy based upon involvement in TV (and TV hardware and TV software), Intel may have figured that it had nothing to lose when it comes to challenging some of the traditional pay TV players, such as Google/Motorola, Cisco/Scientific Atlanta, and all of the existing broadcast and pay TV distributors, as well as all of the content owners and producers.  

Two recent events, first the Next TV conference in New York City on March 21, followed by a one-hour meeting I had with a representative of Intel TV on April 25 at Intel HQs in Santa Clara, Calif., provided some additional insights.

Part one of this two-part coverage, focuses solely on the March event in New York. That lead to the April meeting in California, which will be the focus of a “Mixed Signals” part 2, coming later next week.

Intel TV at Next TV

At Next TV, it was perhaps symbolic of the extraordinary change the traditional media and traditional TV folks are facing today, that one of the new TV players that this author has championed since its initial introduction in February of this year, i.e., Intel TV, had the VP/GM of its new division, Intel TV/Intel New Media, provide the opening keynote address. After that, the first panel was also quite telling, if for no other reason than its title, “TV Everywhere: Disruption, Innovation & Invention.” Another late afternoon panel that provided yet another title connoting this mechanism of big video change was called, “Delivering New Video Products To Multi-Platform Content Audiences.”

From notes I took at Next TV, that opening keynote address by Intel’s GM/VP, Content & Services, Eric Free, showed the depth of the change that is occurring, and nothing less. As noted above, when a company with the legacy and power and strength of an Intel can decide on short notice to challenge the old media status quo, as Intel clearly has, then there appears to be some meat on that bone, so to speak.

Two Worlds

Mr. Free positioned his speech/presentation as a “tale of two worlds.” By that, he meant the two worlds of 1) online video/Over-the-Top (OTT)/broadband video, and 2) TV. Intel’s answer to that opportunity is, in fact, what I will call for the purposes of this write-up, a bona fide “Intel TV” (although to date no one has officially labeled it as such).

Intel TV has been launched as an OTT product in beta service, Mr. Free stated, in a handful of  U.S. markets, as of March 21, with an early focus on Intel’s measurement and observation of 1) consumer behavior, 2) technology, and 3) business models. Mr. Free explained that this phenomenon is important to Intel because “cord shaving and cutting are trends that will continue,” and it is this author’s strong prediction that Intel has a new set-top box/software that offers amazing capacities using a remarkable Intel chip to drive it all. Further, because the TV remains the device that is still driving a tremendous amount of time, and a great many existing and expected additional transactions in the future, the TV is at the core of Intel’s new philosophy.

Mr. Free’s Powerpoint presentation also offered some data to support it. As many do, he started with a figure citing the amount of average TV use by the average American, which was in the range of 4.4 hours/day, he said. Add to that a figure of 94% of Americans who now have access to broadband, with 95% of teens who are online through wired and wireless connectivity, plus the common Cisco statistic stating that by 2016, 54% of Internet traffic will be in the form of video (actually, I think it will be much higher than that). “Tablets and smart phones change the way we do business,” he added.

Better Monetization, Etc.

Another set of points Mr. Free used to buttress his Intel TV development began with the fact that many new players are entering the fray today, and creating their own content. Indeed, he noted, with some surprise, that Internet-only programming, such as Netflix’s new 26-episode series, House of Cards, is making strong inroads. He also championed new content that, as he observed, “…preserves the core dual-revenue streams of advertising and subscription.” The Intel idea is to use the new service to 1) make content easier to find, 2) improve advertising capabilities and their effectiveness, and 3) include better monetization.    

As to why Intel is undertaking this move to TV, Mr. Free offered that it represents a strategic move. He added that so far Intel has brought in many folks to work within the Intel TV project, some “90% of whom come from the TV industry.” This grouping includes those from Microsoft, BBC, Rovi, BSkyB, Apple and Technicolor. Plus, Mr. Free added that Intel TV is more -- as a system -- built around the cloud, and that Intel is “going direct to consumers for [the implementation of the new service].”

What will be most fascinating to observe in the months before what Intel says is a late 2013 launch is how Intel TV manages and manipulates (which it will have to do) the absolute most difficult and core challenge facing the entire endeavor: acquisition of value-based content distribution rights.

Jimmy Schaeffler is a telecom author and chairman and CSO of the Carmel-by-the-Sea-based consultancy, The Carmel Group (www.carmelgroup.com).