Verizon, unsurprisingly, has turned its eye to invest in television, including Intel’s TV branch, reports indicate. The amount of Verizon’s proposed purchase of Intel’s TV venture has not been disclosed, CNET reported, though TechSpot suggested that previous rumors were that Intel sought around $500 million for the project. Intel Media created the project, possibly in haste, but it was unable to successfully secure deals to deliver content on its set top box units. Others have faced similar challenges in this regard. The chip manufacturing giant was busy last summer with a team of around 2,000 people building this experiment in convergence. Intel faced the same kinds of problems that Apple had run into years before in securing content deals.
Tech and Content: A Love Story
Verizon and Intel began their courtship some time ago, even before the Consumer Electronics Show in Las Vegas, a popular industry event in the consumer electronics and entertainment sectors. Companies of all types come to show their new products and prototypes, everything from disc storage to headphones. Verizon was a front-runner in the search for a partner, according to reports from TechSpot. Indeed, in an interview with ABC News, Ben Bajarin, principal analyst at Creative Strategies said that it was a planned strategy for Verizon and Intel to develop the partnership because it aligns with Verizon’s goal of vertically dominating the content domain. Verizon has already purchased intellectual property rights for OnCue.
Verizon obviously made the decision to invest in the smart TV technology domain including the Intel project is a testament to Verizon’s agenda. Intel’s chips, on the other hand, will power or manipulate just about everything eventually, if they live up to their goals.
When Verizon acquires this new venture, it will mean a new era in vertically controlled digital content, a market that is increasingly being overtaken by mega service providers such as Verizon, Comcast and others in the industry. Conflicts are resulting from these circumstances, particularly among other tech giants like Google, Apple and Amazon. This is the aftermath of a new precedent by a federal court that ruled against net neutrality efforts by the Federal Communications Commission (FCC).
Verizon now has a leg up. Their purchase includes all of the employees that Intel had on the project. It also includes the OnCue service developed by Intel Media.
It made sense for Intel to sell their operation to Verizon, a company that can scale the content model based on its experience, infrastructure and massive resources. It was also the context that Intel sought after it decided to refocus on its core chip business. First it sought a partner, but quickly decided on selling to an interested stakeholder. Samsung and AT&T also had discussions. Intel and Verizon’s visions aligned the most, according to CNET.
Verizon plans to serve content on its networks through both fiber optic and 4G connections. Verizon wanted a way to serve content in the digital TV space and it got just that by including Intel.
By Rob Lawson