Intel Agrees To Sell Cloud-Based TV Service To Verizon
January 22, 2014

Verizon To Buy Intel’s Cloud-based TV Biz

Peter Suciu for - Your Universe Online

On Tuesday, The Wall Street Journal reported that Intel Corp. had agreed to sell its online-TV cloud-based service to Verizon Communications Inc. This will include the intellectual property (IP) rights to Intel’s cloud-TV platform.

Rumors of the sale first began back in October, but Intel only confirmed the sale via a press statement on Tuesday. Through this deal, Verizon will obtain IP rights and other assets that enable Intel’s OnCue Cloud TV platform, while Verizon will make employment offers to substantially all of the approximately 350 people in the Intel unit, which will continue to be based in Santa Clara and led by its current management team.

“The OnCue platform and team will help Verizon bring next-generation video services to audiences who increasingly expect to view content when, where and how they want it,” Lowell McAdam, chairman and CEO of Verizon, said via a statement. “Verizon already has extensive video content relationships, fixed and wireless delivery networks, and customer relationships in both the home and on mobile. This transaction provides us with the capabilities to build a powerful, capitally efficient engine for future growth and innovation. We will have the opportunity to enhance, expand, accelerate and integrate our delivery of video products and services to better serve audiences on a wide array of devices.”

The transaction is still subject to customary regulatory approvals, but the companies noted that closing conditions are expected to close later this quarter. Once the transaction is closed it was also noted that Verizon expects to integrate these Internet Protocol-based TV services with its FiOS video as a way to further differentiate FiOS from traditional cable services.

“Intel Media's over-the-top TV products are truly innovative and under Verizon's ownership have the potential to change how people interact with content,” added Brian Kraznich, CEO of Intel Corporation. “The critical factor in gaining efficient access to content is based on your ability to scale quickly in subscribers and end users, which is why selling these assets to Verizon makes perfect sense, with its millions of FiOS network and wireless customers. This sale also enables Intel to further align our focus and resources around advancing our broad computing product portfolio in segments ranging from the Internet-of-Things to data centers.”

Intel had first announced it was entering the TV business in February of 2012, but continuingly pushed back the launch of the OnCue service. The service was reportedly tested across Intel’s campuses, where it included live TV programming as well as on-demand offerings. Online reports had suggested that Intel was working to produce its own set top boxes.

Venture Beat noted on Tuesday that a stumbling block for OnCue was Intel’s efforts to forge content deals with media companies, something that won’t be a problem for Verizon, which has already been dealing with media companies and content creators for several years via its FiOS service.

Terms of the transaction were not disclosed, but Bloomberg reports that Verizon agreed to pay less than $200 million for Intel’s Internet-TV startup. Gigaom also reported that the final price was somewhere between the $500 million that Intel had asked for and the $200 million Verizon had offered.