Is Intel working on a major TV initiative?

Intel(s INTC) has approached media companies with plans to launch a virtual pay TV service, selling subscription bundles over the Internet as opposed to through local cable networks, according to a report by the Wall Street Journal. The move could mark a defiant comeback to the TV space just months after the chip maker shelved a unit that produced CPUs for Google TV(s GOOG) and other connected platforms. This time around, Intel apparently wants to do it alone.
The Wall Street Journal is reporting that Intel is planning to launch a service on its own set-top boxes and market it directly to the consumer – a big change in strategy for a company that previously was content with powering third-party products with its own chip sets. The paper has also learned that Intel could launch the service as early as late 2012.
Intel had produced the CE4100 chipset, which powered the first generation of Google TVs as well as the Boxee Box by D-Link. The high price of the chip has been credited as one of the reasons why Google TV wasn’t able to find more users, and Google started to move its platform toward ARM-powered solutions earlier last year. All of the upcoming second-generation Google TV devices from CE makers like LG and Samsung will be powered by ARM chips.
Intel eventually shuttered its Digital Home Group last October, and at the time said that it was going to concentrate its TV efforts on chips for the next generation of pay TV set-top boxes. Little was known at the time that Intel actually also wanted to run a next-generation service on these new boxes. Earlier this year, rumors surfaced about Intel being in talks to buy Roku. However, it now looks like Roku is trying to raise as much as $50 million in new financing instead.
Details about the content offered through the service are scarce, and content could be the biggest deal breaker for any such venture: Apple tried to convince CBS(s CBS) and others to let it sell individual channels through its Apple TV platform. But broadcasters weren’t having it, and have long resisted this move in order to preserve their traditional revenue streams, which include lucrative retransmission fees from existing pay TV operators.
Image courtesy of (CC-BY_SA) Flickr user huangjiahui.