Intel eyes disposal of web-based TV service to Verizon

Intel has held talks with Verizon Communications over a deal that could see the chipmaker offload its web-based television streaming service just months before it was due to launch.

The two groups met recently to discuss the idea of Verizon taking control of the division and rolling it into its online TV streaming business, said people familiar with the situation.

However, there are understood to be other potential suitors for the service, and the talks with Verizon, which provides TV services through its fibre optic-based FiOS TV, are at a preliminary stage. The discussions were first reported by All Things D.

A deal to part ways with the division would mark the closing of an uncomfortable chapter for Intel, which made much of introducing an online TV service but has struggled to strike content deals with media companies.

Intel’s plan, devised by Erik Huggers, the executive who had headed up web video for the BBC and led the team that designed the BBC iPlayer, involved developing a proprietary set-top box to stream programming pulled in over a home broadband link to a subscriber’s TV set.

Based on demonstrations of the technology this year, most of the technical issues associated with the service appeared to have been solved.

Intel has been testing the service in the homes of thousands of its employees and planned to launch it commercially by the end of this year, charging what Mr Huggers described as “a competitive price”.

He envisaged dividing programming into a number of distinct bundles of channels enabling consumers to pick and choose the channels they were most interested in – something the incumbent cable TV network operators and content providers in the US have resisted.

In July, Brian Krzanich, Intel’s chief executive, admitted that the company faced an uphill battle to break into the TV business. He said the chipmaker lacked experience in content, and he was “cautious” about whether to proceed.

His comments were the first solid indication that Intel was having second thoughts about the web TV project. “In the end, it’s about content,” Mr Krzanich said at the time. “We are not good content players and we do not have a good content user base right now.”

Both Intel and Verizon declined to comment on Wednesday.

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