Intel confirms it wants to be a TV business -

Desperate to find new ways to make cash while the chip industry is in the doldrums, Intel has announced that it will launch an internet television service.

It is a brave move, given that it is a competitive and unfamiliar market. Intel is also not that familiar with dealing with competition and has few friends in the entertainment biz.

Erik Huggers, vice president and general manager of Intel Media, said he is talking with content providers, which anyone will tell you is like negotiating with a crocodile with your arm already half way down its throat.

Huggers said that hundreds of Intel employees and their families are already testing a set-top box the company will sell as part of the service.

That market will put it in direct competition with Amazon, Google, Apple, and the legions trying to scrape out a living from the cable television ecosystem.

The cunning plan is to offer consumers smaller bundles of content than those currently offered by cable operators. After all, nothing draws you more customers than offering them less than the rivals.

But Huggers is confident that Intel will have a compelling product to launch this year. He does have some experience in this field. Huggers previously worked at Microsoft and the BBC, where in 2007 he launched iPlayer. In fact, he thinks the Intel offering has similarities with the iPlayer.

He said that the Intel internet platform was not "a value play, it's a quality play" where it will create a superior experience for the user. In other words, don't feel the width, look at the quality.

Intel's biggest problem will be getting major media outfits to unbundle and licence specific networks and shows at a discount to what cable and satellite partners pay. It has had this problem since the idea was first mooted. It was also abandoned by Microsoft several years ago for that reason.

Big Content has good reason to prop up the cable industry and is not likely to be that co-operative.

What does seem to be different from other offerings is that Intel wants to offer live programming as well as on-demand content. That will be expensive, but it could actually pay off.

Intel's set-top-box will also have a camera that could be used to automatically steer content and ads toward specific users.

Bernard Gershon, head of digital consultancy GershonMedia and a former Disney senior vice president for strategic planning who helped develop Disney's online strategy, told Reuters that the idea will never fly.

We have to be careful here. If we are too dismissive, this ends up being one of those articles that people mock in a decade's time if the whole shebang does actually work. Gershon said that the chance that Intel launches is zero. It has not cut any deals with any content companies, and it is not offering something that differentiates itself enough on service or price to get the deals done.