Verizon buys Intel’s cloud TV service

Verizon said it will use Intel TV to “accelerate the availability of next-generation video services” on its fiber-optic networks and deliver “over-the-top” online video services. (Peter Morgan/AP)
January 21, 2014

Verizon Communications on Tuesday announced the acquisition of an online video-streaming service that will expand its offering of television services across the nation and to any device.

Currently, its Fios television service serves about 5.3 million video customers, but Verizon has its eyes set on using Intel’s video-streaming technology to bring on-demand television to its nationwide wireless network of 102.8 million customers.

Verizon said it will use Intel TV to “accelerate the availability of next-generation video services” on its fiber-optic networks and deliver “over-the-top” online video services.

Neither company disclosed the deal’s value, but some media reports have said that Intel was expecting to sell the unit, called OnCue, for between $200 million and $500 million.

Intel TV was supposed to mark Intel’s big push into the media world, but the chip company announced Tuesday that it’s bowing out of the project. Erik Huggers, general manager of Intel Media, has said he wanted to launch a service that “incorporates literally everything” and would allow live television to be streamed over the Internet.

Those plans changed after Intel appointed a new chief executive, Brian Krzanich, in May to replace Paul Otellini, who retired. With Krzanich at the helm, the firm has begun to focus more on its core chip business, with a particular emphasis on how the company can accelerate its mobile-related growth and become the go-to chip manufacturer for the burgeoning wearable-technology market.

At this year’s International Consumer Electronics Show — which took place after the expected launch date of Intel TV — Krzanich took the stage with a vision of how Intel could build the future through wearable devices and microprocessors. He notably made no mention of a move into the media world.

Verizon said Tuesday that it will buy all the intellectual property and other assets associated with OnCue and will try to retain the 350-person development team. The unit will continue to be based in Santa Clara, Calif.

The deal is subject to regulatory approval. If it is approved, Verizon said, its customers can expect to see OnCue’s search and discovery functions on their Fios fiber-optic services, including the ability to watch videos across multiple screens. The service will also integrate with Verizon Wireless’s 4G LTE network, the company said.

Verizon has been aggressively pursuing new ways to deliver content. In December, the company bought the content-delivery-network company EdgeCast. It also recently announced the acquisition of technology from upLynk that allows for more efficient video uploading and encoding for live and on-demand video.

Related stories:

Intel confirms Internet TV service; launch planned for this year

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Hayley Tsukayama covers consumer technology for The Washington Post.
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