According to TechCrunch, Intel may very well be showing a new cable box at CES, designed to be supported not by lines on the poles, but by the internet connection you already possess (or, you know, hopefully a slightly faster one). Tied to an Intel-manufactured box, this service would hypothetically pass the savings on to customers, and directly compete with the traditional cable providers who currently have a stranglehold on the market.
Intel wants to keep its costs down by licensing smaller packages of TV networks instead of replicating the basic cable TV bundle of more than 100 channels. But network owners won’t agree to smaller bundles without being paid a premium for the channels they choose to license.
“Why would I want you to take subscribers away from another distributor at a lower price?,” asked the same media executive who spoke with Reuters on condition of anonymity.
To change that mindset, Intel has assembled a team of television industry veterans well-schooled in negotiating distribution deals. Leading the group as head of Intel Media is Erik Huggers, who worked on media at Microsoft before going to the BBC. Huggers enlisted as an adviser Garth Ancier, who most recently served as president for BBC Worldwide America and before that worked at NBC, FOX, and Disney.
The big advantage that Intel is offering in exchange for reduced licensing fees is laser-targeted advertising, which we’ve covered before. By using built-in cameras to recognize gender, age, and other features, Intel’s tech could allow content providers to charge more for ads that are more likely to appeal to the viewer, because a 75-year old probably isn’t interested in Halo so much as Polygrip. Intel’s tech also includes the potential for an interactive layer, allowing viewers to click on ads for more information about the products, but that’s not a feature that has proven particularly popular in other mediums like Apple’s iAd.
While Intel is certainly interested in making a lot of settop boxes, and selling a lot of servers to support them, it remains to be seen if they can actually cut enough deals to make it practical, or offer enough channels to be appealing to consumers.
At some point, there will be a company that cracks the Internet cable thing, likely in the form of smaller packages of channels that cost more (but will probably end up costing you less), but I think it’ll be more likely to be Hulu, Netflix, Amazon, or some other company that already has extensive content deals, and enough clout and money to gain a foothold.
And I’m sure Intel will be there to capitalize on it when it does.