| June 7
June 7 Intel Corp's talks to buy
content from media companies for its new TV service are
advancing, and the chipmaker is offering to pay as much as 75
percent more than traditional cable rates, people familiar with
the talks said.
But Intel has yet to close any programming deals, said the
sources, who requested anonymity because they were not
authorized to comment.
CBS, News Corp and Viacom have
reached agreements with Intel on certain details over how their
content would be distributed on the service the chipmaker plans
to begin later this year, one person familiar with the situation
Comcast's NBC Universal is continuing its talks
with Intel but its negotiations are not as advanced others
companies, said another source familiar with the matter.
Intel has moved substantially on subscriber fees it is
willing to pay since the negotiations began, one source said.
It has also suggested preventing viewers from skipping
commercials on the first run of a show, said another source.
Representatives for Viacom, NBC, CBS, News Corp, Disney's
ABC and Time Warner declined to comment.
Media companies typically give better prices to operators
with more viewers, such as large cable companies, and charge
higher prices to smaller or newer entrants. Since Intel's TV
service has yet to start, and therefore has no viewers, it can
expect to pay a premium, all the sources said.
SNL Kagan, a research firm that measures and publishes the
average subscriber fees cable and satellite TV operators pay for
television networks, recorded last year's highest fees were
$5.15 per subscriber per month and were charged by Disney's
While it was not clear exactly what amounts Intel had
originally offered for specific channels, sources said the tech
company was basing its 50 to 75 percent premium on listed
average SNL Kagan subscriber fees.
Intel needs deals with the top five or six U.S. media
companies to secure most of the popular TV channels, according
to one source.
Intel said in February that it planned to compete with Apple
, Amazon and Google and provide a
set-top box and service that would offer live and on-demand
Erik Huggers, the head of Intel Media, has said he plans to
offer customers smaller bundles of content than those currently
being offered by cable and satellite operators.
While Intel has not said how much it plans to charge for its
TV service, Huggers has billed it as a premium product, rather
than a cut-rate option for consumers hoping to save money by
canceling their cable subscriptions. Higher prices for consumers
would give Intel breathing room to pay more to media companies
without sacrificing its own margins.
Intel spokesman Jon Carvill said the chipmaker still plans
to launch its TV service this year, but declined to give details
of negotiations with media companies.
Having missed the mobile revolution and fallen behind in
making chips for smartphones and tablets, Intel senior
executives are eager to be on the leading edge of future
Intel sees the living room as a potential battleground,
where its advanced chips, used in set-top boxes and to power
"cloud" data centers, can give it an advantage and help set the
standard for other home entertainment products.