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As Expected, Intel Runs Face First Into TV Licensing Wall
Just Like Every Internet TV Effort Before It...
by Karl Bode 08:58AM Thursday Jan 03 2013 Tipped by amungus See Profile
The well-hyped (via leaks) Intel TV initiative we briefly discussed earlier this week appears to have already hit a few snags. Rumors earlier this week suggested that Intel was tired of other companies' failing at Internet TV, and was planning a new service that Intel swears will finally disrupt the pay TV ecosystem. Intel, and much of the coverage ignored that nobody (Even tech sweethearts Apple and Google) has been able to get around broadcast industry licensing specifically designed to crush innovation and disruption.

According to a report in the Wall Street Journal, Intel's efforts appears to have hit delays thanks to (drum roll, please) problems with sealing licensing arrangements with cable and broadcast companies:
quote:
One person familiar with Intel's thinking on Monday predicted it would launch its offering by mid-2013. Another person said a service might not arrive until as late as the fourth quarter, citing delays in reaching content-licensing agreements with entertainment companies that own major TV channels.
Ideally Intel appears to want to create a virtual cable TV operator where customers could order and pay for individual TV channels a la carte. With cable and broadcast companies fighting this kind of disruption for much of the last decade, a snag in Intel's plan is far from surprising. Still, it's amusing to see the company anonymously berating other efforts from Google and Apple in the press, only to run face first into the exact same problem that plagued those attempts.

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Transmaster
Don't Blame Me I Voted For Bill and Opus

join:2001-06-20
Cheyenne, WY
Reviews:
·CenturyLink

Dream On Intel

I remember back in the 1990's when people in the know warned about letting the TV entertainment business becoming vertically integrated, content delivery companies owning everything from the production companies to the distribution companies. Well now the chickens are coming home to roost. Because the same companies own everything from beginning to end they have total control over that content and they will not let anything horn into this profitable vertical chain. Goodby Intel, now you know why Google TV is morbid, and Apple TV is a corporate hobby.
--
I am quite sure now that often, very often, in matters concerning religion and politics a man's reasoning powers are not above the monkey's.
- Mark Twain in Eruption
Telco

join:2008-12-19
Reviews:
·Callcentric

Re: Dream On Intel

Surely this is prime antitrust here. Microsoft got sued for a freagin browser, yet these studios and networks are deliberately hampering and restricting competition but get to go on scot-free.

Just another example of the failure of this self-regulation idiocy. When will this political party learn that their gut-feelings never work and have failed for 30 years straight now.
Angrychair

join:2000-09-20
Jacksonville, FL

Re: Dream On Intel

"Antitrust"...

What a quaint notion. Now thank your Republican anti-regulation overlords.

Megsta

@comcast.net

Re: Dream On Intel

said by Angrychair:

"Antitrust"...

What a quaint notion. Now thank your Republican anti-regulation overlords.

Yet it's liberals and democrats who generally want more government oversite, more regulation, and bigger government in general. Something doesn't add up there.

CylonRed
Premium,MVM
join:2000-07-06
Bloom County

Re: Dream On Intel

They BOTH have done a stellar job of creating bigger govt...

NormanS
I gave her time to steal my mind away
Premium,MVM
join:2001-02-14
San Jose, CA
kudos:11
Reviews:
·SONIC.NET
·Pacific Bell - SBC
said by Telco:

When will this political party learn that their gut-feelings never work and have failed for 30 years straight now.

Which party would "this" be? Republicrats? Demicans?

"Meet the new Boss; same as the old Boss."
--
Norman
~Oh Lord, why have you come
~To Konnyu, with the Lion and the Drum
dagg

join:2001-03-25
Galt, CA

1 recommendation

said by Telco:

Surely this is prime antitrust here.

antitrust doesnt exist in a burgeoning fascist state.

jfleni

@bhn.net
Free Enterprise(!) anybody!
MaynardKrebs
Heave Steve, for the good of the country
Premium
join:2009-06-17
kudos:4
said by Transmaster:

I remember back in the 1990's when people in the know warned about letting the TV entertainment business becoming vertically integrated, content delivery companies owning everything from the production companies to the distribution companies. Well now the chickens are coming home to roost. Because the same companies own everything from beginning to end they have total control over that content and they will not let anything horn into this profitable vertical chain. Goodby Intel, now you know why Google TV is morbid, and Apple TV is a corporate hobby.

Dust this decision off and re-apply it everywhere, including ISP's ....
United States v. Paramount Pictures, Inc., et. al
»supreme.justia.com/cases/federal/us/334/131/
Kearnstd
Space Elf
Premium
join:2002-01-22
Mullica Hill, NJ
kudos:1
said by Transmaster:

I remember back in the 1990's when people in the know warned about letting the TV entertainment business becoming vertically integrated, content delivery companies owning everything from the production companies to the distribution companies. Well now the chickens are coming home to roost. Because the same companies own everything from beginning to end they have total control over that content and they will not let anything horn into this profitable vertical chain. Goodby Intel, now you know why Google TV is morbid, and Apple TV is a corporate hobby.

Didn't the government stop the studios from owning the theaters for pretty much this very reason?

Now we have the theater owning the studio(well in effect Comcast owning NBC is like AMC Theaters buying WB.) and nobody in the government seems to care.
--
[65 Arcanist]Filan(High Elf) Zone: Broadband Reports

Greg2600

join:2008-05-20
Belleville, NJ

Will you save money?

That is my question. When most people get done picking channels.

Transmaster
Don't Blame Me I Voted For Bill and Opus

join:2001-06-20
Cheyenne, WY
Reviews:
·CenturyLink

Re: Will you save money?

said by Greg2600:

That is my question. When most people get done picking channels.

That is the 800 pound gorilla. The present bundling system in kind of like a supermarket. Instead of looking at the money made from an individual product a supermarket looks at to over all cash flow and have complex computer models to predict shopping habits. Before Thanksgiving really cheap turkeys. The stores make the money all of the stuff you purchase to go with that turkey, when "bundled" to gather the store makes money while the consumer actually saves money. The same could be said about the TV entertainment business. Because of the bundling process the consumer pays X number of bucks for a bundle, if they paid for each channel it would cost them more. The problem, of course is the vertical integration there is no competition for your dollar. So delivery companies can charge pretty much anything they want. In other words we are stuck with what we have.
--
I am quite sure now that often, very often, in matters concerning religion and politics a man's reasoning powers are not above the monkey's.
- Mark Twain in Eruption
PastTense

join:2011-07-06
united state

Re: Will you save money?

While this type of system could happen, along with cable companies cutting the cost for their bundles because there is competion (Dish, Directv, cable, over the air and various internet options), cable companies could well respond by increasing the cost of their internet services--where only a small fraction of the market has strong alternatives--and then only one--resulting in consumers being no better off financially.

FFH
Premium
join:2002-03-03
Tavistock NJ
kudos:5

Re: Will you save money?

said by PastTense:

cable companies could well respond by increasing the cost of their internet services--where only a small fraction of the market has strong alternatives--and then only one--resulting in consumers being no better off financially.

That is a sure lock on happening. As cable companies lose some TV channel business to streaming competitors the cost of Internet access will rise to cover their TV losses.
--
A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves money from the public treasury.
Telco

join:2008-12-19
Reviews:
·Callcentric

Re: Will you save money?

It's already happening actually. I'd love to see all of those who claimed that Google FTTH is expensive, come here and explain the $74.95 for a 25/4 Comcast service starting today. That's $4.95 more already and does not include Comcast's other BS fees, for a fraction of the service.

BTW Have you ever noticed what they pay and receive in other Big Gov nations (exc Canada).
JPL
Premium
join:2007-04-04
Downingtown, PA
kudos:4

Re: Will you save money?

said by Telco:

It's already happening actually. I'd love to see all of those who claimed that Google FTTH is expensive, come here and explain the $74.95 for a 25/4 Comcast service starting today. That's $4.95 more already and does not include Comcast's other BS fees, for a fraction of the service.

BTW Have you ever noticed what they pay and receive in other Big Gov nations (exc Canada).

Two words to describe this: 'loss leader'. Google Fiber is cheap because they haven't passed on the full cost of operation to consumers yet. All new business start-ups start this way. When a new hair place opened up by my house, they were offering hair cuts for $8. More than 50% less than the competition. Think they're still only charging $8? Of course not. The price is right in line now with everyone else around them. What they offered initially was a promo price - it wasn't designed to earn a profit. It was designed to create flow - make you go into the store to try them out.

Again, this is nothing new. Amazon existed for probably 6 years before they turned a profit (heck, they still incur a loss for every Kindle Fire sold - expecting to make it up on you buying material to go on your Kindle). Verizon inititally really under-priced FiOS. Eventually the R&D gets paid off, though, and you've established a customer base. At that point you need to move into the black. Which means that you have to operate with a positive cash flow.

You can't make the assessment that Google Fiber is 'cheap' because you don't yet know what it will ultimately be priced for when it gets to that positive cash flow stage. My guess - it'll be right in line with everyone else in the market - and probably higher. I know the price of fiber has dropped, but it's still MUCH more expensive than laying coax. Installation alone for fiber is probably 2 to 3 times what the installation cost is for coax (cost of running service to a new home).

And the cost in those 'big government nations' is hidden. Ok, you don't pay as much for monthly service on some things. But if you're willing to incur a marginal tax rate of 90%... go right ahead. The point is - you're still paying for it. It's just not going directly to the company. You make it up (and then some - since government is far from the most efficient conduit of spending) in taxes.
Expand your moderator at work
elray

join:2000-12-16
Santa Monica, CA
Reviews:
·Time Warner Cable
·EarthLink
said by Greg2600:

That is my question. When most people get done picking channels.

It can't.

The only way ala-carte is viable is if consumers pay more, per-channel, and in total, than today's ARPU.

That is possible with Intel's proposal, but highly unlikely, since the content conglomerates are not going to be tempted with such a risky proposition.

Instead, Intel will end up marketing this technology as the best-of-me-too, and cable/premium content will require you have an existing relationship with a traditional pay-tv provider.
Skippy25

join:2000-09-13
Hazelwood, MO

Re: Will you save money?

That is your assumption and the same BS the industry spouts out as though we should just take it at face value.

I for one do not agree for 2 reasons.
1.) The industry claims it and they are full of crap so pretty much anything they say when it comes to consumers the opposite is true.
2.) There are only a few channels that are very expensive that make the entire package expensive that many would not subscribe to. Disney and ESPN channels are just 2 examples.

Regardless, even if I end up spending the same amount or even a little more to get the channels I want that is my choice as opposed to the current forced "choice" we live with now.

Most channels cost less than a dollar per subscriber and can be sold at a dollar given them plenty of profit on them. Assuming of course that they will want to charge more because they wont be able to force the providers into X sub numbers with forced tiering it will cause the channels to be sold at a true market value. This will probably bring the cost up a little per channel. How much? No one will know until it is done, but what we do know is that the channel will charge what they can and we will pay what we are willing.

Let's not forget, ala-carte doesn't mean there don't have to be bundles. They can still bundle based on X channels, themes, channel owners or whatever other creative way they want in ADDITION to having the channels available on a completely ala-carte option.
JPL
Premium
join:2007-04-04
Downingtown, PA
kudos:4

Re: Will you save money?

Your numbers just aren't correct. There are examples out there today of what such pricing would be like. For example, Verizon carries a channel called Wealth TV. It's a VERY cheap channel for them to carry. I think they get it for something like 4 cents/subscriber. The thing is, Wealth also has an ala carte option - you can get the channel through devices like Roku. How much does it cost you to subscribe to the channel that way? $5/month. Why so much? Because of how the business model works.

With the traditional model that cable companies follow, the channel gets paid per subscriber that has access to the channel. Whether they watch the channel or not. This is why content providers really want cable companies to carry their channel on the lowest possible tier. The lower the tier, the more subscribers that have the channel, and therefore the more money the content provider makes on the channel. But if you were to pay for the channel directly, the content provider has to charge you alot more for the channel than they charge the cable company, because there are far fewer people who would actively go pay for the channel. And since offering a channel's content isn't free... they have to get so much cash-flow to make the channel profitable. And remember, this is a tiny little channel that costs cable operators next to nothing to carry. Imagine how much an ESPN or Disney or Fox News would cost you ala carte.

I'm not a big fan of the ala carte option mainly because, at the end of the day, you'll spend just as much as you do now, but only get a fraction of the channels. If I'm going to spend $100/month anyway, I would much rather have 300+ channels for that money. Even channels I wouldn't normally care about occasionally carry program that I like. I don't think the reason ala carte hasn't taken off is because of some conglomerate somewhere stopping it. I think it's because the current model is far more efficient at providing the biggest bang for your buck. These companies, in other words, are serving the wants of their customers. Doubt that? Just peruse some of these forums - how many people get their panties in a twist over channel counts? Alot. People get really upset when the provider they use has fewer channels than other providers. If the market really was demanding ala carte, I think these guys would be falling all over themselves to provide it. I just don't think the demand doesn't really exist for it.
elray

join:2000-12-16
Santa Monica, CA
Reviews:
·Time Warner Cable
·EarthLink
said by Skippy25:

That is your assumption and the same BS the industry spouts out as though we should just take it at face value.

I for one do not agree for 2 reasons.
1.) The industry claims it and they are full of crap so pretty much anything they say when it comes to consumers the opposite is true.
2.) There are only a few channels that are very expensive that make the entire package expensive that many would not subscribe to. Disney and ESPN channels are just 2 examples.

Regardless, even if I end up spending the same amount or even a little more to get the channels I want that is my choice as opposed to the current forced "choice" we live with now.

Most channels cost less than a dollar per subscriber and can be sold at a dollar given them plenty of profit on them. Assuming of course that they will want to charge more because they wont be able to force the providers into X sub numbers with forced tiering it will cause the channels to be sold at a true market value. This will probably bring the cost up a little per channel. How much? No one will know until it is done, but what we do know is that the channel will charge what they can and we will pay what we are willing.

Let's not forget, ala-carte doesn't mean there don't have to be bundles. They can still bundle based on X channels, themes, channel owners or whatever other creative way they want in ADDITION to having the channels available on a completely ala-carte option.

1) The industry is not full of crap. They're in business to make a profit, and absent legislation to the contrary, they are generally allowed to negotiate content bundling agreements, much to our collective dismay.

2) We all know that there is a Sports Tax, which 75% of pay to subsidize the 25%. But industry is very comfortable with that model, and they aren't going to change it. Even Google forces its KC subscribers to pay for it.

You affirmed my point - industry isn't going to permit "ala-carte" unless you and I pay more than ARPU not less. That can work, if and only if they let us choose 2nd- and 3rd-tier channels that we currently have to buy in bundles, likewise for premiums.

The figures that you cite are meaningless. Sure, MDU/bulk/headend, CATV and satellite pay $.10/drop/channel for some channels, others are $1. That doesn't carry over to ala-carte - where rates would have to at least 3-4x more or greater to be revenue-neutral to the content seller, plus cover the additional customer service overhead for channel delivery and billing management.

Industry is NOT going to abandon the last-mile guaranteed bulk revenue for the headache of direct-to-consumer sales, via IPTV, OTT or the Roku channel store.

Under normal conditions, "greed" would drive them to do so, but they all know the pitfalls of taking responsibility for delivery of streams in a net-neutral world and doing customer service, all the while netting less revenue.

Crappy as it is, CableCo has a pretty good handle on customer service and repair. Do you really want to talk to Santa Domingo, Cebu, or Mumbai when you can't stream Matlock?

tshirt
Premium,MVM
join:2004-07-11
Snohomish, WA
kudos:4
No, you won't save money.
But this is different, THEY are picking and choosing, not the end user, and not really the business side either, as there are other channels that cost more and yield less revenue. This is censorship.

garykva

@coxfiber.net

No one says....

No one says you have to pay for TV. Look at all the websites that offer episodes online. Sure they may be a little older than whats currently on, but they typically are free. A&E, History, USA and a few others do this.

Cable is pricey - they always say its because the channel wants more money from the cable provider. Thats hogwash in most cases. Its a ploy to raise prices.
jbwhite99

join:2005-03-22
Raleigh, NC

Re: No one says....

Not saying I condone it, but I keep hearing that ABC/Disney/ESPN gets $5.91 PER MONTH from your cable bill. Same for CBS/MTV/Nickelodeon, FOX/FSN/FX/Fox News, CNN/HBO/TNT/TBS, and NBC/NBC Sports/USA. Even the local channels get into the game - here, our local CBS station (which also runs the local Fox affiliate) has been in a war with Direct TV - they are even giving away free antennas.

If a la carte came, I'd sign up in a minute...

OneEye

join:2006-04-15
Peachtree City, GA

Long term, many new jobs!

If Intel, Google, & Apple want to succeed at becoming content providers, then there long term objective should be to start their own studios. With home grown content, they could be very competitive.

Just think of all the new jobs that would be developed in production, distribution, and talent.

PacNWE97

@qwest.net

Ownership means distribution rights

Ever look at the beginning of a movie and see all the production/(distribution) companies listed after the big brand name distributor.

That's how get access to content.

If Intel, Apple, Google which ever company wants to break into distribution, perhaps they should mimic a portion of media's business model and back the content creators directly.

If Intel wants to distribute, then perhaps it needs to be a player and own a potion of the content at its origin point.
Expand your moderator at work

psilocybin

join:2007-07-19
Monroe, NY

Innovate or Die

The industry will have to eventually innovate or die. Wasn't it an industry executive that once said they're not worried about cord cutters but about the people that will never pay for a TV subscription?

Camaro
Question everything
Premium
join:2008-04-05
Westfield, MA
kudos:1

Re: Innovate or Die

When they control the "pipes" they don't have to do a damn thing, they have the power, and unless the blasphemy words come in to play which is government regulation. We are either going to have to cancel or keep taking up the ass.

anon9472

@telepacific.net

Intel TV licensing

Maybe they should buy a major content owner, grant the kind of license they want, and then spin the company off again.
old_wiz_60

join:2005-06-03
Bedford, MA

1 recommendation

Lots of luck...

they will be about as successful as the U.S. Government is at stopping the flow of Cocaine.
Cloud9

join:2013-01-03

INTEL(igent) Way thru the Walled-Garden

The most effective way for Intel, Google, Apple or any other IP-based service to scale tv's walled garden is to partner with the mso's vs competing with them. Sure, they might be able to nibble around the edges by launching virtual services with hybrid channel line-ups & more robust, cloud-based UI's...but there's no reason they shouldn't just integrate the mso's IP streaming services to fill the gaps in commercial-grade programming. In addition to saving them billions, it would allow them to concentrate on what they do best. Apple pioneered this model in the mobile space when it forged the first carrier deal, so there's no reason a similar approach won't work with major cable/sat providers. Instead of the silo'd (and very fragmented) approach we have today, it would also allow the industry to deliver more uniform, integrated services to consumers...with more freedom of choice from a device and OS perspective. Especially now that cable and satellite providers are pushing (authenticated) linear channels over IP, there's no reason these channels shouldn't be accessible via the device of choice...whether it be xBox, AppleTV, or Intel, Roku...LG, Samsung, Funai...or new, more converged services we've yet to see. As long as the content is properly authenticated (just like cell service is authenticated by the iPhone)...its just a matter of UI, navigation and co-branding. Time will tell...

jfleni

@bhn.net

Re: INTEL(igent) Way thru the Walled-Garden

It should be obvious to everybody, especially TV plutocrats, that all TV will end up online (broadcast TV will disappear and be reallocated for communications), and much of it (the good stuff) will cost something extra. The cable/TV kings are going to be castrated and/or competed out of existence by features nobody even knows about now, and they can only slow it down, not stop it.

After it happens, people will wonder why it took so long.

cpsycho

join:2008-06-03
HarperLand
Reviews:
·Start Communicat..
·Wightman Telecom

Idears right here.

I think MS Apple Google and Intel should team up and make a media production company that would host a lot of different channels. Call it MAGI networks. These four giants together could create something very impressive and put telco's/cableco's to shame. They could own 25% of the company each. They would have more money to buy content too.
crypt0

join:2012-12-22
Edmonton, AB
Reviews:
·TELUS

And the winner is... nobody.

The second you start paying for what you want is the second you stop watching commercials because who is going to pay for commercials, right?

"They" won't have that. 80% of the economy is based on the fact we sit and watch commercials. BS you say. 50 years ago I would have agreed. Back when people didn't spend all there spare time watching tv it was local business doing local advertising. Those days are gone and Big business has no way to get you to buy their stuff unless we all sit down and watch, listen and then go purchase.

When I say "they" I don't just mean content providers... I mean the Auto, Food, Pet, Sports, Electronics, Entertainment, Pharma, etc. and of course marketing industries. Who are "they" tied too? Your Government, so no help there either. Is there a better way, a cheaper way that works better for you? Yes. Quit holding your breath waiting for the system to work for you and just cut the cord.