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Intel’s efforts to get into the Internet TV business reportedly could be delayed well into the new year, thanks in large part to challenges getting licensing agreements from content producers.
There had been speculation that Intel officials would talk about the company’s TV efforts during this month’s CES event, which kicks off Jan. 8 in Las Vegas. However, according to a Jan. 1 report in The Wall Street Journal, the launch of the giant chip maker’s TV initiative will be delayed until mid-2013—or maybe even late 2013—while the company continues to try to reach licensing agreements with the entertainment companies that own the TV channels.
One of the unnamed sources quoted in The Journal story said Intel officials will talk about processors for mobile devices and PCs at the show, but will not bring up the vendor’s TV project.
Reports about Intel’s desire to get into the TV business began circulating in March 2012, when The Journal reported that company officials wanted to create a virtual TV network that would broadcast U.S. television channels over the Internet. Intel’s plans include creating a virtual cable operator that would bundle TV content and an Intel-powered Web-hosted set-top box that would stream the content service.
Users would pay for the ability to view content on a wide variety of connected devices, from televisions and PCs to smartphones and tablets. A user interface would let customers browse content and select what they want to watch, according to reports.
The reports from early 2012 indicated that Intel officials already were negotiating with the entertainment and media companies, telling them at the time that the company was looking to launch the effort in late 2012. Intel reportedly has reached an agreement with one media company, but The Journal source declined to name the media company.
Intel faces a number of hurdles as it looks to move into the Web TV business, including the fact that while the company is strong on the technology behind the devices used by consumers, it has little experience selling products directly to consumers. In addition, media companies can be reluctant to deal with Internet TV operations because these companies are concerned about how such deals would impact current distribution partners.
Still, Web TV could be another avenue for Intel to expand its business into new growth areas as it looks to reduce its reliance on the PC business. The chip vendor and other technology companies with close ties to the struggling global PC market—including chip rival Advanced Micro Devices and top PC makers Hewlett-Packard and Dell—are seeing the effects of declining systems sales on their earnings, as consumers deal with the uncertain worldwide economy and opt to spend more of their money on such devices as smartphones and tablets.
Those companies have all looked to new growth areas. Both HP and Dell are pushing to boost their enterprise IT solutions businesses, and AMD is looking to such areas as dense servers and embedded devices as they aim to reduce how much of their revenues come from PCs. Right now, 85 percent of AMD’s revenues come from the PC chip business; executives want to lower that to 40 to 50 percent.
Intel officials are pushing the company’s technology into mobile devices, including smartphones and tablets, the bulk of which currently run on chips designed by ARM Holdings. They also are looking to grow Intel’s revenues in such areas as software, services and high-performance computing.