Intel looking to exit TV business: report

Intel looking to exit TV business: report

9:57am EDT

(Reuters) – Chipmaker Intel Corp is having second thoughts about its nascent television service and is in talks with Verizon Communications Inc to take over the business, according to a report on tech website All Things D, citing people familiar with the matter. While discussions were in the advanced stages, it was still unclear if Verizon plans to take full control of Intel’s media unit or Intel would maintain a stake in the unit, the report said. Representatives from Intel and Verizon did not immediately respond to requests for comment. Earlier this year, Intel decided it would launch an Internet TV service with live and on-demand content in a bid to find an alternative revenue stream as its core business of providing chips to computer makers erodes. It’s a crowded field as Apple Inc, Google Inc, Sony Corp and Microsoft Corp jockey for position to own the living room through TV, while Netflix Inc and Amazon.com Inc’s streaming video services have millions of subscribers. Intel has also struggled to reach content deals with media companies.Intel Said to Be in Talks on Verizon Takeover of TV Service

Intel Corp. (INTC) is in talks with Verizon Communications Inc. (VZ) about having the phone company take over its effort to deliver TV over the Internet using a new kind of set-top box, according to a person familiar with the negotiations.

While the two sides have no agreement in place, a deal would probably end Intel’s involvement in the project, said the person, who asked not to be identified because the talks are private. The AllThingsD website previously reported on the discussions.

Intel, the world’s largest chipmaker, had planned to offer a pay-TV service in the U.S. that would compete with Comcast Corp. and DirecTV. (DTV) The idea was to use Intel-designed set-top boxes, which would receive programming via the Internet. Intel’s new management decided to scale back its involvement earlier this year because it wanted to focus on the company’s existing business and efforts to sell more mobile-phone chips, a person familiar with the company’s plans said in September.

Verizon, the second-largest U.S. phone company, already has a pay-TV service. The company has been exploring methods to deliver more of its FiOS video through pathways that are outside the reach of its fiber-optic network, such as wireless and over-the-Internet delivery. The company recently ended a joint development agreement with the cable companies and it has been focused on Redbox Instant as a potential streaming service.

Deidre Hart, a spokeswoman with New York-based Verizon, declined to comment, as did Intel.

Intel shares fell less than 1 percent to $24.50 at the close in New York, leaving them up 19 percent this year. Verizon declined 1.1 percent to $50.53.

Web-Based TV

Intel has been working on a Web-based TV product since at least early 2012. Erik Huggers, general manager of Intel Media and a former British Broadcasting Corp. executive, said in February that the company planned to start service this year.

The service was designed to give consumers access to content across TV sets, smartphones and mobile devices. Intel, based in Santa Clara, California, had planned to offer both live programming and a large library of video-on-demand content.

To contact the reporter on this story: Ian King in San Francisco at ianking@bloomberg.net