Intel's Push Into Web TV Hits Delays
Intel Corp.'s effort to develop an Internet-based TV service and associated hardware is taking longer than expected, people familiar with the company's plans say, in part due to delays in reaching content agreements with media companies.
Context & Ripple Effects
Intel’s web-TV ambitions have been building since its 2010 web-TV launch effort with Google. A January 1 report also indicated that Intel would not unveil the service at CES, narrowing the immediate expectation from a major launch to continued development.
The Wall Street Journal’s account frames the bottleneck as content licensing rather than hardware. That matters because Intel’s proposed service requires media-company agreements before its associated devices can offer a competitive television package.
First-order effects
- According to people familiar with Intel’s plans, delays in content agreements push back the timetable for Intel’s Internet-TV service and its associated hardware.
- Media companies retain near-term leverage over Intel’s TV plans because their programming agreements determine whether the service can launch with a viable offering.
Second-order effects
- Intel’s effort shifts from a hardware-led product challenge to a rights-negotiation challenge, tying the value of its set-top hardware to terms set by content owners.
- The reported absence of a CES announcement gives rival web-TV efforts more time to pursue programming deals and establish their own launch schedules.
Third-order effects
- The episode points to a structural constraint on web-TV entrants: technology companies can build devices and delivery systems, but access to television programming remains controlled by media-rights holders.
- If licensing negotiations continue to set launch timing, web TV will develop around companies able to combine consumer hardware with durable content relationships rather than hardware capability alone.
The trend: Web TV is becoming a contest over content rights as much as consumer hardware, with media-company agreements setting the pace of market entry.