Can Intel dominate the future TV industry?

The chip company is on the prowl for unique and colorful personalities to help develop its television sector.

By Benzinga Mar 19, 2013 3:51PM

Watching television CorbisBy Louis Bedigian

Can Intel (INTC) hire its way to the top of the entertainment industry? The company is about to find out.

Starting with less than 100 employees in 2012, Intel Media -- a new division created to build a TV service and an accompanying set-top box -- has grown into a team of more than 300 employees.

According to Reuters, the company is now hoping to add another 60 people to the group. Within six months, as many as 400 people could be working for Intel Media.

One of the job listings includes an "audience representative" with one very specific qualification. He or she "must be weird."

Last month, Intel announced that it hired talent from three major companies -- Apple (AAPL), Netflix (NFLX) and Google (GOOG) -- to build its own Internet TV service (See Benzinga).

That service, which has yet to receive an official name, must overcome a number of hurdles if Intel expects to thrive in a world dominated by Comcast (CMCSA) and Time Warner Cable (TWC) (see Benzinga).

First and foremost, Intel must come up with a way to persuade cable companies and content providers to offer their services at a reasonable price. Cable companies are often reluctant to work with Internet TV services because they fear they'll be replaced.

Likewise, content providers have approached online distribution with caution, knowing that their profits could be diluted by the proliferation of Netflix and other online services.

The irony is that part of that fear was created in-house. NBC and Fox of News Corporation (NWSA) created Hulu to promote and control the future of online TV.

In 2009, Disney (DIS) joined the fray by acquiring a 27% stake in Hulu. Over the next year, all three companies began to populate Hulu with new TV content. NBC and ABC offered the entire series of many shows, including Lost, Desperate Housewives, 30 Rock and Parks & Recreation.

Not long after that, content providers began to second guess their decision. NBC began to move old seasons of its shows (including 30 Rock and Parks & Recreation) to the online service created by its new owner, Comcast.

Hulu's owners were so disenchanted by the company that they nearly sold it to another industry player, as AP reported. Apple and Google were among the companies that were rumored to be interested in buying Hulu.

In a recent blog post, Hulu CEO Jason Kilar, who will leave the company at the end of the quarter, said that Disney and News Corp. are currently "finalizing their forward-looking plans" with Hulu. This has led to some speculation that the two companies may be looking to abandon Hulu for other services -- including their own.

Virtually all of the ABC shows that are on Hulu can also be found on Viewers still have to subscribe to Hulu Plus to watch ABC shows that are no longer airing (such as Lost) or to watch the entire current season of new shows (such as Scandal or Once Upon a Time).

They'll need a subscription to Netflix if they want to watch old episodes of ABC shows that are still airing. Grey's Anatomy is one of the exceptions, as it can be found on both Hulu and Netflix. However, only the current season is available on Hulu and Hulu Plus.

This strategy -- where ABC applies specific content to each service -- may hint at the future of online television. Even so, where does that leave Intel?

Intel has not indicated that its service will work without cable or Netflix or any other existing service. If it does, consumers will have to subscribe to another service -- one that will likely be limited by whatever shows or movies content makers are willing to provide.

If Intel's offering only works with existing services -- as hinted at by company executives (see redOrbit) -- then the only benefit would be if it could save consumers money and provide a superior TV experience. That would be the multi-billion-dollar goal of everyone in the TV industry.

Apple was expected to be the company to pull this off (see Benzinga). The Verge thinks it will be Intel.

More from Benzinga

Mar 20, 2013 10:05AM
Go Intel, someone has got to do a better job with TV than is being done today. The services out today are mediocre at best.
Mar 19, 2013 10:36PM
Wouldn't it be amusing if Tick Tock out did iTV?
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