By John Rondthaler
As many readers may already know, technology companies have been looking into the TV business, including Phoenix-based Intel, the Wall Street Journal reported. But this is not a new venture for Intel; in fact, Intel has been investigating the TV business since 2008. According to the Wall Street Journal’s sources, Intel would sell a Web-connected set-top box capable of streaming TV and video-on-demand programming. Consumers would still need to have their own Internet service however.
As far as what may be driving the interest, research shows that American consumers have been watching less TV for some time now (New York Times). Less TV perhaps, but that doesn’t mean the consumer isn’t watching TV content; it just means he or she is watching it over the Internet, on his or her computer.
The recent shift in consumer behavior has opened up huge doors for the technology industry. For example, Google-owed You Tube is reported to be investing another $100m in the new venture and will be adding 25 hours of fresh programming a day, as reported
by MediaWeek.
But the first Google TV products bombed with consumers, hindered by immature devices and a lack of compelling content. It remains to be seen whether Intel or any other company will succeed in launching a virtual cable operation. Current cable, satellite and telecommunications companies already pay nearly $38 billion per year to license TV channels. Any upstart would certainly have to pay higher costs because lesser operators often have to pay more per subscriber.
So why is Intel interested in the TV consumer business and how does it benefit the consumer. I’ll address the latter first and then tell you why (I believe) Intel has a special interest
on the set-top box business.
Top five potential benefits to
consumers of a virtual cable provider:
1. More competition means lower prices to the consumer.
2. TV à la carte – only the programming you want.
3. Access to bigger and better Internet-only content. (Not that the consumer doesn’t have that today, but the quality will be much better due to standards-based set-top boxes.)
4. Individualized advertising based on your social media preferences – that means you receive specific offers to the goods and services you use.
5. Ease of use – For instance, accessibility features added for blind users, such that scrolling menus would talk aloud. We are talking TV on steroids (TV 2.0).
As far as why Intel is interested in the consumer set-top box business – that’s simple: The death of the consumer PC. PC sales are down and future sales are expected decline. Intel is now looking forward; it wants to move the PC into the set-top box, where it belongs.
John Rondthaler has managed some of the most widely recognized networks in America, and is a consultant to small and medium size business (SMB) and other industry professionals. He can be reached at jcr@itcloudlink.com or you can view his Facebook page, www.facebook.com/itcloudlink.
