Intel Viiv push puts pressure on telco TV

Intel said today that it has signed up 40 partners to work with its forthcoming Viiv brand of consumer electronics devices that will act as home media centers, in a deal with significant implications for telco TV providers.

Among the group of partners are well-known brands such as TiVo, VirginMega and Adobe Systems. However, also included is Telecom Italia, which has been pushing hard into the triple-play market, and MovieLink, which earlier this year signed a content distribution agreement with Verizon.

Using the Viiv brand in the same way it used Centrino in laptops, Intel plans to label a variety of devices including media centers and digital video recorders. For telcos, those devices won’t replace set-top boxes. However, they could play into plans to offer whole-house service. SBC, for example, has said that one of the ways it plans to differentiate its soon-to-be-launched U-Verse video service from cable and satellite offerings is by offering consumers the ability to centralize both stored and streaming content at the TV.

However, according to Danny Briere, CEO of TeleChoice, the fact that Intel is bringing its brand and power to the table with consumer electronics devices puts cable operators and telcos in a difficult position.

“This isn’t a play where consumer electronics vendors can sell through the service providers,” he said. “This is directly in their face. I think this would put a phenomenal amount of pressure on the business case for telcos and cable operators.”

Likening the move to Apple’s introduction of the iPod, Briere said Intel’s plans will give consumers a direct link to content providers, leaving service providers in the position of providing either a broadband network that faces constant price pressure or doing nothing, which is even more dangerous.

“They’re big competition is starting to be the [consumer electronics] guys because they’re assuming that the broadband network is always going to be there,” he said.

However, getting to the point is going to take longer than anyone expects, according to David Novak, executive vice president of Video Without Boundaries, a media center vendor that yesterday announced plans to make retail, interactive two-way digital cable products that includes CableLabs’ OpenCable Application Platform (OCAP)-compliant middleware.

“It isn’t as simple as being a branded company,” he said. “Microsoft has been attacking the cable industry for seven years, and it’s really now just marginally successful with its MediaCenter PC. The problem is the two worlds [of PC and TV] don’t mesh very well. Just bringing TiVo to a PC isn’t that new. The tough bit is integrating it with a pay TV service.”