# Intels New Cable Service Could Cripple Companies Like TiVo and DirecTV



## Johncv (Jun 11, 2002)

Could this be the end of TiVo?

http://beta.fool.com/sammattera/2013/07/31/intels-new-cable-service-could-cripple-companies-l/42116/


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## moyekj (Jan 24, 2006)

Intel's problem is the same as everyone else that have tried before - getting enough content to make the venture viable. What makes Intel more likely to succeed where the likes of Apple and Google have not?


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## rifleman69 (Jan 6, 2005)

Not even in the slightest. Different area of the tv spectrum.


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## shadowplay0918 (May 16, 2011)

and there is still the issues with data caps......can't see cable companies raising it to open up more competition..


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## tenthplanet (Mar 5, 2004)

My prediction is Intel is going to take a big write down on this in the next few years. This idea ranks up there with some of the more stunning ways Microsoft and Google have lost money on certain ventures.
So called financial sites have a horrible track record when it comes to their take on technology.


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## stahta01 (Dec 23, 2001)

tenthplanet said:


> My prediction is Intel is going to take a big write down on this in the next few years. This idea ranks up there with some of the more stunning ways Microsoft and Google have lost money on certain ventures.
> So called financial sites have a horrible track record when it comes to their take on technology.


I agree that is possible; but, they are more of a hardware company. So, maybe they have a different method of doing it. I am thinking of Microsoft and Google TV ventures.

Tim S.


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## davezatz (Apr 18, 2002)

How many times has Intel flirted with TV and either failed or backed off? I'd been expecting a more sizable presence from them at the Cable Show in June based on some intel I'd received (intel, ha) - but perhaps rumors of content blacklisting are more than hearsay. As an aside, this is the same author who wrote TiVo is doomed a few days ago - the company may or may not be doomed, but he didn't have his facts or thesis in order. So perhaps this is just his negatory hook.


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## ggieseke (May 30, 2008)

davezatz said:


> How many times has Intel flirted with TV and either failed or backed off? I'd been expecting a more sizable presence from them at the Cable Show in June based on some intel I'd received (intel, ha) - but perhaps rumors of content blacklisting are more than hearsay. As an aside, this is the same author who wrote TiVo is doomed a few days ago - the company may or may not be doomed, but he didn't have his facts or thesis in order. So perhaps this is just his negatory hook.


+1


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## stevel (Aug 23, 2000)

davezatz said:


> How many times has Intel flirted with TV and either failed or backed off?.


Um, none? I know that Intel tried to get set top box makers interested in one of their earlier media processors, but I don't think that counts. Nor do I count Google TV. What are you thinking of? You're more familiar with the market than I am, but I'm fairly familiar with Intel. This is the first time I am aware of that Intel tried anything more than being a component supplier.


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## NoVa (Feb 26, 2006)

IMO - Intel is looking for new avenues of investments since the it seems PC's are going away faster than anticipated.

That said, a cloud based DVR would take a lot of a cooperation & partnership with content providers. Not sure if that is possible...


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## davezatz (Apr 18, 2002)

stevel said:


> Um, none? I know that Intel tried to get set top box makers interested in one of their earlier media processors, but I don't think that counts


Several. Here's a classic. 

http://www.intel.com/pressroom/archive/releases/2008/20080820comp_b.htm


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## aaronwt (Jan 31, 2002)

Johncv said:


> Could this be the end of TiVo?
> 
> http://beta.fool.com/sammattera/2013/07/31/intels-new-cable-service-could-cripple-companies-l/42116/


I don't see how.

"...Intel has set up a server farm that will record all TV and keep it for days at a time.."

Only days worth of programming. I need to keep some recorded shows for weeks or months.


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## Johncv (Jun 11, 2002)

aaronwt said:


> I don't see how.
> 
> "...Intel has set up a server farm that will record all TV and keep it for days at a time.."
> 
> Only days worth of programming. I need to keep some recorded shows for weeks or months.


I think that the point, to stop people from keeping shows for weeks, months, even years. If need to keep a show for longer than a few days, the producers want you to buy it.


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## wmcbrine (Aug 2, 2003)

Johncv said:


> Could this be the end of TiVo?


No.

Article is garbage.


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## buscuitboy (Aug 8, 2005)

wmcbrine said:


> No.
> 
> Article is garbage.


I agree. Cable networks aren't gonna allow this as it would cut too DEEP into the huge revenue stream they get from cable companies.

And as much as I would love to see a-la-cart programming on some level, it just ain't gonna happen anytime soon. Cable companies and networks don't want it & they are in bed with each other so why cut off the cash cow they have going. If Steve Jobs (Apple) couldn't get it done, nobody can.


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## slowbiscuit (Sep 19, 2006)

But this lame, tired old business model is not going to last forever now that HSI capable of carrying the load is relatively widespread. Someone, some time is going to come up with a way to break through these exclusive distro agreements and shake things up. Might not be Intel, Google, or Apple, but it's going to happen eventually.

The real problem is not on the TV side of the house anyway (because there are alternatives, or will be), it's on the monopoly/duopoly HSI situation for millions of people. The cable/telco MSOs are going to get their money one way or another, either by jacking video or by squeezing you for HSI.

Satellite will be in real trouble once internet video distro takes over, though - all they'll have left are rural areas without HSI.


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## aadam101 (Jul 15, 2002)

Intel's PR dept is a hit. They have generated the buzz they hoped for. I am doubtful the product will amount to much. If Apple and Google can't pull it off, why would Intel have better success?


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## aadam101 (Jul 15, 2002)

Looks like Intel has changed their mind. They are selling out to Verizon.

http://www.engadget.com/2013/10/30/intel-oncue-iptv-web-tv-verizon-sale-eric-huggers-report/


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## slowbiscuit (Sep 19, 2006)

Sad, but not unexpected. Lots of players talk big about cable over the internet, nobody can bring the deal home.


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## JosephB (Nov 19, 2010)

There are several problems with the whole idea of internet TV. The first of which is that the internet providers are all, each and every one of them, also TV providers. So, even with net neutrality regulations, how would you expect them to take the competition lying down without any response? 

First, there's data caps. These are already here and will never go away now that over the top video is a threat to the cable and phone companies

Second, the cable companies will always have pricing leverage over the newcomers. The vast majority of the money the programmers make come from cable companies, and most of them have most favored nation clauses in their contracts. This means that Intel, Apple, or anyone else cannot get a better price for ESPN or CNN than Cox or DirecTV. So, if you consider that along with the fact that the cable companies control the pricing for the internet AND their TV packages plus the fact that any subscriber of an over the top video package would have to get internet access, you can quickly see how the cable companies will always be able to out-price the over the top providers.

The real problem facing cable companies (and by extension, TiVo) is a certain percentage of the population is simply watching less TV. For people who are cutting the cord and going with some combination of OTA, Hulu, Netflix, and Amazon an IP delivered service isn't what they're looking for. They want to watch the two or three things they want and that's it. It's a la carte to the extreme, and even if you offered a la carte with the way linear TV is delivered, I don't think anyone would take it up. 

There will always be people who want 500 channels of linear TV, so even if there are radical changes and new services and different interfaces, the traditional cable and satellite companies won't disappear.


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## unitron (Apr 28, 2006)

What little description there was of what Intel's TV thing was going to be before they gave up and sold the pieces to Verizon didn't sound like it had to have Intel specifically involved.

It could have been anyone with enough money to throw at getting it started, and someone like Amazon or Google probably has more experience with the whole "massive server farm talking to every household in the country at the same time" deal anyway.


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## aadam101 (Jul 15, 2002)

JosephB said:


> There are several problems with the whole idea of internet TV. The first of which is that the internet providers are all, each and every one of them, also TV providers. So, even with net neutrality regulations, how would you expect them to take the competition lying down without any response?
> 
> First, there's data caps. These are already here and will never go away now that over the top video is a threat to the cable and phone companies
> 
> ...


This is why need Google Fiber to shake things up. While all the other providers are a TV provider first, internet provider second. Google Fiber is an internet provider first, TV provider second. I think if they HAD to dump the TV portion, they would do it in a second.


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## Dan203 (Apr 17, 2000)

JosephB said:


> even if you offered a la carte with the way linear TV is delivered, I don't think anyone would take it up.


I think a LOT of people would take it up. The only reason we have 500 channels is because of bundling. Most people would eliminate 95% of their channels if they had an option to do so. And if there was a true VOD option, without forced commercials, then people would be all over it.

That being said the content providers would never go for either system, so it's never going to happen.


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## JosephB (Nov 19, 2010)

Dan203 said:


> I think a LOT of people would take it up. The only reason we have 500 channels is because of bundling. Most people would eliminate 95% of their channels if they had an option to do so. And if there was a true VOD option, without forced commercials, then people would be all over it.
> 
> That being said the content providers would never go for either system, so it's never going to happen.


I think a VOD system would take off, but buying 10 linear channels is a half-measure, and the type of people who get buy with netflix only want a netflix style interface. That's part of the whole point of going with something like that.

You're right, though, the programmers are never going to go for it, and to be honest I don't blame them. I don't want to pay $100 for the 10 channels I want which is what an a la carte system would cost. People think that going to a la carte, paying $20 in total, and everyone eliminating their $150 cable bills would be some wonderful utopia, but the media companies aren't going to keep producing what little bit of good content they do produce if 70% of their revenues dry up.


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## Dan203 (Apr 17, 2000)

In Canada there is apparently some law that prevents bundling of channels, so apparently what the networks are doing now is taking their most popular programs from their primary channel and moving them to their less popular channels. That way the MSOs still have to buy all the crappy secondary channels. This is apparently why Always Sunny got moved from FX to FXX and apparently there are a few shows on Discovery that did this as well. There is a thread in this forum about it somewhere.


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## JosephB (Nov 19, 2010)

Dan203 said:


> In Canada there is apparently some law that prevents bundling of channels, so apparently what the networks are doing now is taking their most popular programs from their primary channel and moving them to their less popular channels. That way the MSOs still have to buy all the crappy secondary channels. This is apparently why Always Sunny got moved from FX to FXX and apparently there are a few shows on Discovery that did this as well. There is a thread in this forum about it somewhere.


That also has the added benefit of forcing US carriers to not drop them or pick them up as they convert old channels and launch new ones.


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## aadam101 (Jul 15, 2002)

Dan203 said:


> In Canada there is apparently some law that prevents bundling of channels, so apparently what the networks are doing now is taking their most popular programs from their primary channel and moving them to their less popular channels. That way the MSOs still have to buy all the crappy secondary channels. This is apparently why Always Sunny got moved from FX to FXX and apparently there are a few shows on Discovery that did this as well. There is a thread in this forum about it somewhere.


I would imagine that becomes hard to sustain over time. Do they wait until a show gets popular on a popular network and then suddenly move it? That's not going to sit well with people.


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## mattack (Apr 9, 2001)

JosephB said:


> I don't want to pay $100 for the 10 channels I want which is what an a la carte system would cost.


I think you're overestimating the cost, and I've said before and I'll say it again -- I'd gladly pay THE SAME I'm paying now for *the exact channels I want to watch*.

That way, it presumably cuts some costs for me (e.g. several bucks a month for ESPN(*) per subscriber), and "costs more" because I would turn off the shopping and religion channels that supposedly pay the cable company to be carried.. But since I think I'd turn off the vast majority of channels, I would think at worst the price would stay the same. I'd pay EVEN MORE for everything without commercials.. not tons more, but a bit more.

I'm actually on a smaller bundle than I had at my old house, and miss a few channels, like National Geographic (though I think only for a couple of the specials, even not the well known ones) and GSN (but again that was mostly for High Stakes Poker, which isn't making new eps now).. but there are probably a few more I don't remember..

(*) ESPN is one of the few where I *MIGHT* pay the imho way too expensive prices of a buck or two an episode, for WSOP.. that and the hot dog eating contest on July 4 are about the only things I *regularly* watch on ESPN.

This would at least get realistic values for how many people REALLY want each channel.


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## JosephB (Nov 19, 2010)

mattack said:


> I think you're overestimating the cost, and I've said before and I'll say it again -- I'd gladly pay THE SAME I'm paying now for *the exact channels I want to watch*.
> 
> That way, it presumably cuts some costs for me (e.g. several bucks a month for ESPN(*) per subscriber), and "costs more" because I would turn off the shopping and religion channels that supposedly pay the cable company to be carried.. But since I think I'd turn off the vast majority of channels, I would think at worst the price would stay the same. I'd pay EVEN MORE for everything without commercials.. not tons more, but a bit more.
> 
> ...


So what would be the point of completely upending the way things work if the price stayed the same, or only changed a few dollars? What does it matter that you get channels you don't watch if you're willing to pay the same price without them? What you're talking about would be an insanely complicated system, and for anyone who might want to watch all of them would be crazy expensive. And, costs would go up, no doubt, not down. You assume that less channels means less cost, but a lot of channels are cheap because they're in front of a lot of eyeballs and in a lot of homes so they can extract higher ad rates. A la carte ruins that so costs would go way, way up. And, when you say you'd pay "a bit more" for a channel with no commercials, that will never happen either. Ad rates make up way more than subscriber fees, so even if you didn't go a la carte but went to no commercials, rates would have to like quadruple.

It's nice to say what you want and what you'd pay for it, but there's no way in a million years any of that will ever happen and the industry maintain the same amount and/or quality of content.


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## dlfl (Jul 6, 2006)

JosephB said:


> So what would be the point of completely upending the way things work if the price stayed the same, or only changed a few dollars? What does it matter that you get channels you don't watch if you're willing to pay the same price without them? What you're talking about would be an insanely complicated system............


I agree about price. Why bother with a la carte if it doesn't reduce my cost?

I'm not convinced about the "insanely complicated system". They already have a la carte premium channel packages so they're already dealing with this "complication". Just need to scale it up.


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## JosephB (Nov 19, 2010)

dlfl said:


> I agree about price. Why bother with a la carte if it doesn't reduce my cost?
> 
> I'm not convinced about the "insanely complicated system". They already have a la carte premium channel packages so they're already dealing with this "complication". Just need to scale it up.


Well, I primarily meant in terms of if the price stays the same. You'd have dozens of packages or even worse hundreds of channels to try to pick. How would it be priced? What about people who want everything? etc. There are a lot of things to consider that make it complicated.


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## dlfl (Jul 6, 2006)

JosephB said:


> Well, I primarily meant in terms of if the price stays the same. You'd have dozens of packages or even worse hundreds of channels to try to pick. How would it be priced? What about people who want everything? etc. There are a lot of things to consider that make it complicated.


Such complications are easily handled when profit (or just survival) is seen as the result. The problem is the cable cos don't see a great potential for increasing profit here.


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## JosephB (Nov 19, 2010)

dlfl said:


> Such complications are easily handled when profit (or just survival) is seen as the result. The problem is the cable cos don't see a great potential for increasing profit here.


Actually, it has been shown over and over that too many options decrease profits. Customers get paralyzed by the number of options and either don't buy as much or give up or otherwise. There's a sweet spot. You want to have enough options to satisfy everyone at each price point but not so many that it's overwhelming.


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## dlfl (Jul 6, 2006)

JosephB said:


> Actually, it has been shown over and over that too many options decrease profits. Customers get paralyzed by the number of options and either don't buy as much or give up or otherwise. There's a sweet spot. You want to have enough options to satisfy everyone at each price point but not so many that it's overwhelming.


Yeah, I guess people who are overwhelmed by restaurant menus would be in trouble.


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