Quick Note: Intel Wants to Sell OnCue Internet TV Service for $500M
November 26, 2013 12:40 PM
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Intel wants to close the deal by the end of the year
Intel is trying to sell off its OnCue online pay-TV service for a reported $500 million and wants to complete the deal by the end of the year. Unnamed sources cited by
claim that Verizon Communications is one of the potential buyers of OnCue.
Intel has offered no official comment on the deal.
The main attraction of OnCue is its ability to deliver pay-TV programming over any high-speed internet connection without the need for a dedicated cable line. Intel has pumped a lot of resources – including dedicated hardware and software platforms -- into OnCue, but has faced challenges getting off the ground.
One of the big reasons the service failed according to industry sources is due to costs.
sources claim that licensing for paid programming cost Intel hundred of millions of dollars upfront under the terms Intel was able to get the chipmaker would have needed to outlay hundreds of millions of dollars up front regardless of whether the service was a hit or not with customers.
Intel CEO Brian Krzanich decided that the internet TV arm was a distraction for the company and has decided to make a
major push into mobile
internet-connected devices instead
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11/26/2013 7:47:48 PM
It's a bit misleading to say consumer are paying for content they don't watch.
Once a cable/sat company installs the ability to broadcast 500 channels, they barely save anything from a consumer only wanting 1 channel. Some popular channels have the leverage to charge significant subscriber fees, but most of the channels people don't watch cost providers almost nothing.
Same thing with content providers. The crappy channels have negligible running costs for Viacom, Time Warner, etc. Their goal is to maximize revenue with whatever pricing scheme they can get away with. Selling channels a la carte is unlikely to save you anything once they adjust prices.
Until a significant portion of the population stops ordering cable/satellite (and it may well happen in the next decade) and becomes a market worth luring back in, both content providers and cable/sat companies are more worried about existing customers switching to online. They'll resist it until they have no choice.
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