Intel could launch an Internet-based TV service in 2012

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Intel is reportedly working on an Internet-based TV service that would compete with offerings from traditional cable operators, phone companies, and satellite TV providers. According to the Wall Street Journal, the world's top chipmaker has been pitching the idea to media companies for the past few months, and essentially wants to bring the same model of bundled channels but delivered on-demand via its own set-top box for a fee.

The service is aimed at the U.S. market and Intel has told its potential partners that it wants to start the service before the end of the year. Apparently the company has already solicited "rate cards" from networks to determine the costs of licensing channels or types of on-demand programs, and has hired a BBC exec to lead a secretive Intel Media group. However, it doesn't appear to have struck programming deals yet.

This is the latest in a string of efforts by Intel to move its business beyond the traditional PC industry. Besides more recently pushing hard to gain a foothold in the smartphone and tablet market, Intel has been dabbling in online TV for years. In October, it wound down its efforts to make chips for digital "smart" TVs when it shut down its Digital Home Group, but has since continued making chips for set-top boxes.

Other companies racing to grab a piece of the online video business -- with varying degrees of success -- include Netflix, Hulu, Amazon, Apple, and Google. One of the biggest hurdles most of them have had to fight has been licensing content from an industry that doesn't want to upset an already lucrative business model.

It remains to be seen if a company with limited content experience like Intel can successfully broker such deals, and if customers respond to the often-criticized bundle channel subscription model they're familiar with.

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