Intel Has Plans That Could Revolutionize Pay-TV

Progress is being made in talks between crucial TV networks and Intel Corp. (NASDAQ:INTC), according to sources who requested to remain anonymous because of the private nature of the discussions. Time Warner (NYSE:TWX), NBC Universal (NASDAQ:CMCSA) and Viacom (NYSE:VIAB) have all signed off on the general outlines of Intel’s new service, the first of its kind to offer pay-TV services online.

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The sources have said that the companies are now working through financial negotiations, and other particulars of the contracts. Although the discussions with other networks are underway, they are not as far along; but the three aforementioned major networks offer plenty of industry heft to build from as the service nears launch. 

Intel is planning to offer a set-top box for consumer TVs, and plans to offer an online streaming service this year, putting pressure on companies such as Comcast Corp. (NASDAQ:CMCSA) and DirecTV (NASDAQ:DTV). It also represents a substantial shift in direction for the chipmaker, which is facing increasing competition and is predicting its second consecutive year of declines, and is looking to diversify its offerings and decrease its reliance on microchips…

Intel believes it can deliver a more flexible service through consumer’s broadband accounts, that gives subscribers more choices over the channels they receive and offers an easier-to-use electronic programming guide, Bloomberg reported.

Media companies gain a deep-pocketed customer that will probably pay more initially for the content than existing cable and satellite-TV systems, said David Bank, an analyst at RBC Capital in New York, in an email.

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“It’s great” for media companies, Bank said. “Intel will have to pay a premium as the new kid on the block.”

The service would be available on numerous devices in addition to the TV, including computers, phones, and tablets. Ideally, Intel is hoping to obtain means to provide live television, a library of on-demand shows, and rights for a cloud-based digital video recorder, according to the sources.

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