Intel this year plans to sell a set-top box and Internet-based streaming media service that will bundle TV channels for subscribers, but its plans will likely face hurdles from the 800-pound gorillas of the streaming media market.
In February, Erik Huggers, general manager of Intel Media, said at the All Things Digital media conference that the company is working on an "Internet television platform." The service will include on-demand programming, live television broadcasts and "catch-up TV," or program rebroadcasts.
Huggers compared Intel's as-yet-unnamed service to the BBC's iPlayer, which makes programs available up to seven days after the original broadcast on any mobile device.
"If you miss something, it's already there," he said. "I think in this market we've yet to see a proper catch-up television service."
Intel mimics Apple
Mike McGuire, a research vice president at Gartner, said that what Intel is planning is more akin to what Apple did with iTunes in that it doesn't expect to make a profit off the service itself -- at least not in the beginning.
Apple initially launched the online music service as a way to entice consumers to buy the company's hardware, and while it eventually became profitable, it didn't start out that way, McGuire said. Intel's service could likewise be an enticement for consumers to purchase tablets, laptops or other set-top boxes that use its processors.
"You can see the overall strategic value: Let's create a service that [system manufacturers] can create apps and links to for their products, and that will compete against these other content ecosystems that are forming with Apple, Google, etc.," McGuire said.
Jon Carvill, director of Intel corporate communications, said that while system manufacturers using Intel processors are a target market for the service, the primary product will be Intel hardware combined with its own service.
"You'll purchase the device retail or directly from us and have live linear television content ... all delivered via your current Internet connection -- we don't supply that," he said. "So you bring it home, plug it into your wall, plug in an HDMI cable, put in your Wi-Fi password and then you'll have television."
"It's hardware, software and services coming from us," Carvill added. "Our device is fully integrated. It's not an app."
Intel is not currently revealing any details on deals it may have made with television content providers. "We're very broadly engaged, [and] have made good progress," Carvill said.
Intel's set-top box will also have a camera with recognition technology similar to that used in Microsoft's Kinect box. However, unlike Kinect, Intel's box won't track motion. It's more about identifying users and bringing up preset configurations on the box, Carvill said.
"It's our belief that the TV experience can be more personal. They'll have their programs and their profiles set up, especially in homes with multiple people," he said. "And, there are ways you can watch without it as well."
Guardians at the gate
While Apple TV, Google Play and Microsoft's Streaming Media Services can be seen as competitors, cable, Satellite and ISP providers such as Comcast, Time Warner and Verizon are also likely to push back against Intel, experts said. Those cable and ISP providers have well-established, long-term contracts with content providers such as ESPN and HBO. "They could say, '[If] you do sign this deal [with Intel], you're in violation with the contract you signed with us,'" McGuire said.
One other scenario might be that cable and ISP providers simply favor their own streaming services with pricing models, or limit bandwidth based on what customers stream.
"You have the issue of access to content, but then you also have the issue of access to pipes," said John Bergmayer, senior staff attorney with Public Knowledge, a nonprofit group that works for democratic principles among communication systems.
For example, Comcast could charge more for a third-party streaming service than for its own, or it could throttle bandwidth or even place caps on it to limit how much content customer receives from streaming media services.
"If you just set the cap at a level where it would be unrealistic to use your broadband connection as a full cable replacement ..., I think that is likely how the threat could work," Bergmayer said.
The feds get involved
"A couple years ago, when the net neutrality fight was first happening, a lot of the discussion was around what Comcast was doing to BitTorrent traffic. They were just actively throttling content from particular sources," Bergmayer added.
Comcast could also offer its own IP streaming video service, and exempt its service from caps.
The Federal Communications Commission (FCC) adopted Open Internet rules to ensure that the Internet remains a level playing field, but Verizon is challenging the rules in a Washington circuit court of appeals on the basis that the U.S. government doesn't have the right to regulate broadband.
"They're also making the First Amendment argument that they have the right to block what they want to," Bergmayer said.
Carvill would not comment on any pressure coming from established streaming media services, saying only that Intel "feels good about its progress, and nothing's changed" about its launch plans.
