It appears some of the nation's largest TV providers are feeling the heat from Netflix and other streaming services. Not only did DirecTV purchase Hulu to give it some expertise in this area, but the company is now trying to secure over-the-top (OTT) rights from programmers. The purpose of OTT is to allow subscribers to directly access movies and TV shows via the internet, instead of a conventional set-top box. The initiative to acquire these rights is not limited to DirecTV, it also includes Time Warner Cable and Charter Communications.
According to the Los Angeles Times, TV providers don't plan on making the transition to online content anytime soon. The primary motivation is to get on equal footing with rivals Netflix, Amazon and Hulu. They effectively want to widen their potential distribution channels, in the scenario that internet streaming becomes the most popular viewing method. A DirecTV spokesperson told the LA Times, "Our programming deals are confidential so we can't specifically comment, but our one objective in these deals is not to restrict access but to ensure we get equal or better treatment with both existing and new competitors."
On another note, Intel is also trying to enter the broadband TV space. Although they wanted to launch the service later this year, they have failed to land any programmers to sign on. As a result, Intel is making up for its unproven reputation in the TV industry by offering extremely lucrative deals. Early reports suggest that Intel is willing to pay nearly 75 percent more than traditional cable companies for the same content.
Industry analysts have also suggested that Intel will have to land deals with five of the major six US media companies in order to provide a competitive breadth of channels. Not surprisingly, the chip-maker has tried their best to enter the market. A cable network executive explained that "they are very aggressive", while a secondary source believes that once one programmer signs on, the rest should fall like dominos.
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