Spring 2012

OUR RESOURCES
Brave New World of TV
By John Rondthaler
As many readers may already know,
technology companies have been
looking into the TV business, including
Phoenix-based Intel, the Wall
Street Journal reported. But this is not
a new venture for Intel; in fact, Intel
has been investigating the TV business
since 2008. According to the Wall
Street Journal’s sources, Intel would sell
a Web-connected set-top box capable
of streaming TV and video-on-demand
programming. Consumers would still
need to have their own Internet service
however.
As far as what may be driving the interest,
research shows that American consumers
have been watching less TV for
some time now (New York Times). Less
TV perhaps, but that doesn’t mean the
consumer isn’t watching TV content; it
just means he or she is watching it over
the Internet, on his or her computer.
The recent shift in consumer behavior
has opened up huge doors for the
technology industry. For example,
Google-owed You Tube is reported to
be investing another $100m in the new
venture and will be adding 25 hours of
fresh programming a day, as reported
by MediaWeek.
But the first Google TV products
bombed with consumers, hindered by
immature devices and a lack of compelling
content. It remains to be seen
whether Intel or any other company
will succeed in launching a virtual
cable operation. Current cable, satellite
and telecommunications companies
already pay nearly $38 billion per year
to license TV channels. Any upstart
would certainly have to pay higher
costs because lesser operators often
have to pay more per subscriber.
So why is Intel interested in the TV
consumer business and how does it
benefit the consumer. I’ll address the
latter first and then tell you why (I
believe) Intel has a special interest
on the set-top box business.
Top five potential benefits to
consumers of a virtual cable provider:
1. More competition means lower
prices to the consumer.
2. TV à la carte – only the programming
you want.
3. Access to bigger and better Internetonly
content. (Not that the consumer
doesn’t have that today, but
the quality will be much better due
to standards-based set-top boxes.)
4. Individualized advertising based on
your social media preferences – that
means you receive specific offers to
the goods and services you use.
5. Ease of use – For instance, accessibility
features added for blind users,
such that scrolling menus would
talk aloud. We are talking TV on
steroids (TV 2.0).
As far as why Intel is interested in the
consumer set-top box business – that’s
simple: The death of the consumer PC.
PC sales are down and future sales are
expected decline. Intel is now looking
forward; it wants to move the PC into
the set-top box, where it belongs.
John Rondthaler has managed some of the most widely recognized networks in
America, and is a consultant to small and medium size business (SMB) and
other industry professionals. He can be reached at jcr@itcloudlink.com or you
can view his Facebook page, www.facebook.com/itcloudlink.
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Desert Ridge Lifestyles Spring 2012