Will Intel’s New IPTV Service Kill the Cable Industry As We Know?
Gianluigi is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
Intel (NASDAQ: INTC) has been working on a set-top-box (STB) which will be available to limited beta customers in March. Intel's STB looks to focus on convenience while making the experience simpler for consumers. It will offer cable channels over the Internet regardless of provider. It will offer consumers the ability to subscribe to content per channel and per show. This not only fits convenience, it's also a good example how modularity of people's lives is translated in a device.
Forbes reports on the “Cloud DVR” feature, this feature intends to allow viewers to:
- Watch any past TV show at any time,
- Without the need to record it ahead of time,
- Pause live TV,
- and rewind shows in progress.
This is extremely interesting, taking out the burden of recording and increasing convenience to an optimum. Now this is utility!
Intel took this road after it had hoped that GoogleTV and AppleTV would fuel the demand for their chips. I don't know the exact reason, but another -known- example from the telecom industry is HTC, that first created parts and phones for other telecom brands, but eventually created their own phone to create higher revenues.
As elaborated in this previous article on Apple’s TV set, competition can come from any angle, and the key is utility, convenience and scope of available content. Competition can come from suppliers, acknowledging demand and create their own device.
With this set-top-box Intel "made clear to Hollywood that they are serious about the product and they are serious about this product and dedicated to its longevity. Intel is also prepared to invest heavily in making it a success," as mentioned on Forbes. In contrast, Apple (NASDAQ: AAPL), Google (NASDAQ: GOOG), and Microsoft (NASDAQ: MSFT) have always viewed Hollywood as something of a hobby. Microsoft's is developing a set-top-box that will be released alongside the Xbox Next. It will offer entertainment services as well as basic gaming technologies. Their primary competition will be the AppleTV and similar devices.
Hollywood itself was also struggling to adapt to changing dynamics, two years ago I wrote about its response to change where Hollywood was going to offer premium VOD for $30. My question back then was if that was their answer of adapting to the digital society? Illegal downloading happens already, also right after the movies have run in theaters. What will a "Premium VOD" change to this attitude when prices will be charged between $20 - $30.
If we take the “what alternatives are there around” approach, Intel might have a great value proposition this time, focusing on convenience, the right content at the right time in an increasingly modular society.
Business success depends partially on the right suppliers, if Intel can get Hollywood behind itself and it can properly market its benefits to the different markets to reach critical mass, this can be a very interesting development!
How do you think the market will respond?
GLCuccureddu has no positions in the stocks mentioned above. The Motley Fool owns shares of Google, Intel, and Microsoft. Motley Fool newsletter services recommend Google, Intel, and Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. Is this post wrong? Click here. Think you can do better? Join us and write your own!