After months of speculation, Verizon Communications and Intel Corporation have announced an agreement for Verizon to purchase from Intel the assets of Intel Media, a business division dedicated to the development of Cloud TV products and services.
The transaction is designed to accelerate the availability of next-generation video services, both integrated with Verizon FiOS fibre-optic networks and delivered ‘over the top’ to any device.
Terms of the transaction were not disclosed.
Reports surfaced late October 2013 that Intel had decided to give up on its OnCue platform, frustrated with the lack of cooperation from content providers, which, in turn, has undermined confidence in the venture from new CEO Brian M. Krzanich.
Earlier in 2013, Intel executives privately acknowledged that they would fall short of their widely publicised goal of introducing OnCue to the public in time for Christmas.
Verizon will purchase intellectual property rights and other assets that enable Intel’s OnCue Cloud TV platform. Verizon will also make employment offers to substantially all of the approximately 350-person Intel unit, which will continue to be based in Santa Clara and be led by its current management team.
The transaction is subject to customary regulatory approvals and closing conditions and is expected to close early in the first quarter of 2014.
Lowell McAdam, chairman and CEO of Verizon, said: “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. 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.”
Once the transaction is closed, Verizon expects to integrate IP-based TV services with FiOS video to further differentiate FiOS from traditional cable TV offerings and to reduce ongoing deployment costs. FiOS customers are also expected to benefit from elegant search and discovery, interactivity and cross-screen ease of use – integrated with the Verizon Wireless 4G LTE network.
Brian Krzanich, CEO of Intel Corporation, said: “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. 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 centres.”
Combined with Verizon’s current and recently announced new video-delivery capabilities, the transaction also provides the platform and skill sets for Verizon to continue to expand the depth, breadth and scope of its video offerings, including mobile, in the future.
Erik Huggers, corporate vice president and general manager of Intel Media, said: “We’re incredibly proud of what we’ve achieved. Intel provided us with the technological know-how and resources to develop products and services that will fundamentally change the way we experience TV, and now Verizon gives us access to the marketplace and the ability to scale. It’s the next logical step, and we’re excited about the road ahead.”
The Intel Media acquisition follows Verizon’s December agreement to acquire EdgeCast, an industry leader in content delivery networks. Also in fourth-quarter 2013, Verizon announced the acquisition of upLynk’s exclusive technology that streamlines the process of uploading and encoding of video for live, linear and video-on-demand content.