Intel (NASDAQ:INTC) may have to wait on its TV service after all. Earlier this week there was speculation that the company was preparing to launch a set-top box along with a virtual cable service as the next tech giant to assault the living room. There was a possibility that Intel would unveil the offering at the Consumer Electronics Show, or CES, next week.
Sadly, the chip giant's plans have hit a roadblock, and it may not be ready for prime time. The Wall Street Journal is reporting that Intel is running into delays over content negotiations. That's the common theme holding back other tech heavyweights, since content creators are averse to disrupting the status quo, even if consumers are asking for it.
Intel's plan was to roll out service on a city-by-city basis, which would help mitigate the perceived risk to content owners and allow them to test out the hybrid service that serves up TV content over the Internet. Scoring a la carte channel licensing deals is what most of the potential disrupters are looking for, including Apple (NASDAQ:AAPL) and Google (NASDAQ:GOOGL). The problem is that entertainment companies love nothing more than to sell filler channels bundled with the popular ones.
It's all very reminiscent of the music industry a decade ago, which adamantly opposed Apple's plan to unbundle songs from albums and sell them separately in iTunes. A hit song could easily sell an album full of mostly filler, much like how TV viewers will pay up for a bundled package with their favorite channel even though they'll never watch some of them.
It's easy to envision Apple's ideal approach: channels as apps on the Apple TV home screen that can be accessed individually. Google would certainly like this as well, but is also willing to stick with the status quo in the meantime as its Google Fiber service includes the typical TV channel packages.
Intel can't rely on either Apple or Google, though, for its TV push, as both the Mac maker and search giant use ARM-based (NASDAQ:ARMH) chips in their offerings.
The odds are stacked against Intel in TV. It has almost no track record selling devices directly to consumers, much less operating services sold directly to consumers. Even if it succeeds, it's pursuing a low-unit and low-margin business.
Fool contributor Evan Niu, CFA, owns shares of Apple. The Motley Fool owns shares of Apple, Google, and Intel. Motley Fool newsletter services recommend Apple, Google, and Intel. 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.
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