Tuesday, March 13, 2012

Intel Wants To Enter The Cable Distribution Field

Google wants to sell its Motorola set top box business; Cisco wants to sell its S-A set top box business as well. And Apple wants to build a TV set to manage TV content without a box.  Now comes Intel with its own plan to build a box and its own web-based cable TV platform.  The end of EBIF technology perhaps and the rise of web based applications.

"The entry of Intel -- with its large bankroll -- into over-the-top video would add another potentially serious competitor to traditional pay-TV services, as consumers face a growing number of options for receiving video content over broadband from the likes of Netflix, Apple, and others." There sure is a lot of change in the cable landscape occurring these days.  But what each of these companies, Intel included, lacks, is the wireless platform to run it.

Cable built there TV business first and now the pipeline used is capable of delivering TV, internet, and phone. And customers rely on this pipeline for the web.  So what broadband stream will Intel and others use to get content through their box and onto the screen?  And what will the access cost be to the consumer?  Because if the cost for buying access on top of the course for an Intel box is higher than traditional cable, customers may be reluctant to switch.  

The other concern for Intel, Apple and others will be the cost to acquire content.  Cable operators enjoy best, lowest rates because of the number of subs they cover.  For start ups to traditional cable programming, their license costs per sub will most likely be higher.  And  that will not help them to bring a competitive offer to the consumer.  

For those two reasons, lack of a broadband pipeline and higher costs for acquiring content, may be what ultimately stops them from competing effectively.  The solution, for Intel and others, may be to work with cable operators, and not to compete.  For now, all we can do is sit back and watch.