Intel Corporation (NASDAQ:INTC) is keen to sell its yet-to-launch Internet television service, OnCue for $500 million by the year end, according to a report from Bloomberg. One of the sources told Bloomberg that Verizon Communications Inc. (NYSE:VZ) entered into a dialogue with the content providers about the streaming television service.
Krzanich calls Pay TV a Distraction
Intel has failed to wither away the challenges related to its project OnCue since it was first unveiled in February. Brian Krzanich, CEO of Intel made it clear that Intel was finding it difficult to meet the expenses and was a distraction, according to the sources who conveyed the news to Reuters. According to the sources, though Intel was nearing a deal finalization with some content providers, but it would have cost the chip maker millions of dollars irrespective of the time taken to launch the service.
Intel Corporation (NASDAQ:INTC) will be able to recover the cost if it gets the price demanded as the company is withdrawing from the plan of offering a pay TV service to focus on its core business of supplying chips. According to the sources, Samsung Electronics Co and Liberty global also entered into a discussion with Intel. Brian Krzanich has called the pay TV as a distraction for the company, and has put the project in the back burner. Instead, the new CEO, who took the position in May, is looking forward to foray more into the mobile devices segment.
Verizon already in action
Intel Corporation (NASDAQ:INTC)’s much hyped TV service OnCue is enabled to offer pay TV programming through a high speed internet connection, which would give a hard-hitting competition to cable TV services that air show through the dedicated lines installed by territory. Intel developed a system that includes servers, set-top boxes and applications that stream content to phones and tablets.
Verizon Communications Inc. (NYSE:VZ), which is one of the suitors already, provides FiOS fiber optic pay-TV service, which stands parallel to the cable companies. With OnCue, the company will get to expand beyond FiOS. According to the sources, Verizon is discussing with the media companies that whether new contracts will be required for streaming service or the already existing FiOS TV contracts will do with some amendments.