Intel's rumored cable and streaming TV service that was expected to debut at the International CES has hit a few snags, making its unveiling at the event very unlikely, according to the Wall Street Journal.
Intel's initiative was expected to include new hardware -- a set-top box -- and a service offering that will make the chip maker a sort of virtual cable provider. The company has faced difficulty cutting deals with providers for the content portion of its offering, the Journal reported.
Typically, content is sold to distributors, like cable TV companies, in bundles -- packages of channels that are passed on to cable subscribers whether they care about watching some of those channels or not.
Intel wants its service to sell individual channels to its subscribers. Content providers are fearful that if they made that kind of a deal with Intel, it would disrupt the existing ecosystem for pay TV, which has been very rewarding for the content industry.
If content providers did agree to allow Intel to implement some kind of a la carte scheme, the chip maker would likely have to pay a premium for the privilege. If the cost of that premium were passed on to consumers, it could make the Intel offering a non-starter in an environment where consumers want to spend less on TV.
Negotiations with content providers could delay the launch of Intel TV to the middle of this year, or even later, according to the Journal.
In the interim, however, Intel could choose to tease its TV service at high-profile industry events, such as the AllThingsD conference in February, where Erik Huggers, general manager of Intel's digital home division, is scheduled to talk.
In addition, more information about the service will surely leak out this spring if, as Forbes is reporting, Intel starts beta tests of its TV hardware.
Forbes also raised the possibility that Intel TV subscribers will not only be able to purchase TV by the channel, but also by the individual show.
Intel's TV venture would represent a change of direction for the company which, until now, has been content with making chips for other people's products.
Initially, Intel extended that strategy to its TV efforts by developing chips for hardware running Google's TV platform. When Intel's chips were spurned by Google TV makers for those based on ARM architecture, Intel decided to do its own thing in the TV space.
As part of that effort, Intel set up its digital home division, which, according to TechCrunch, is run like a start-up in stealth mode, and populated it with talent like Huggers, who was the ramrod for the BBC's iPlayer project, and Sean Ludick, who helped Jawbone get its products into box stores like Best Buy, Walmart and Costco.