updated 05:39 pm EDT, Sat June 8, 2013
Chipmaker will pay content providers a premium for new service
In order to get its new television service up and running, chipmaker Intel is offering the content providers rates as much as 75 percent higher than the traditional cable providers pay. Sources close to Intel's negotiations say the potentially higher rates are to be expected, as Intel would enter the television service market as a newcomer, and content providers typically charge a premium for operators with smaller user bases. Reuters reports that Intel is hoping to position its service at a premium level, but the outcome of its negotiations will likely have some impact on pricing.
Reportedly, Intel has already secured agreements with CBS, News Corp., and Viacom, but negotiations with Comcast's NBC Universal are not as advanced. In order to ensure that its service launches with access to the most popular content, Intel needs to secure agreements with at least five or six of the top media companies.
To that end, the chipmaker is offering 50 to 75 percent more than the highest per-subscriber per-month rates charged in 2012. That equates to between $7.72 and $9 per subscriber.
That range of prices is indicative of the lengths to which Intel is prepared to go in order to launch its television service. The chipmaker -- which has become wary of the overall health of the personal computer industry it dominates -- sees a set-top box as a means of vastly growing the market for the advanced processors it produces.
Word that Intel was preparing a set-top box began to pick up late last year, with reports indicating that the company was preparing to roll out its service no a city-by-city basis. That strategy was thought to be a means for Intel to get around the difficult process of negotiating with the content makers, but this most recent revelation indicates that Intel has decided to secure the content before rolling out.
Intel's set-top box will likely launch later this year, assuming it can secure the necessary deals. When it does, it will enter an increasingly crowded field, with Apple's Apple TV competing with Roku, Smart TVs, and others, including Microsoft's forthcoming Xbox One, which also has advanced integration with television content.