Verizon Communications confirmed that it will buy Intel Media, Intel’s IP video operation. The company expects to use the technology to improve multi-screen delivery on both its wireline FiOS network and on its wireless LTE network.
Intel Media was driving to become a competitive commercial video company, similar to Netflix, Amazon Instant, or the forthcoming service from Sony. The operation reportedly failed to secure the rights to an adequate volume of content to sustain a video business, however. The sale to Verizon had been reported earlier, but not confirmed by either company.
Terms of the transaction were not disclosed. The purchase price reported by several media outlets was $500 million. Verizon said it has purchased intellectual property rights and other assets that enable Intel’s OnCue Cloud TV platform.
Verizon also intends to keep on the 350 or so employees, which is based in Santa Clara. Current management, including Erik Huggers, corporate vice president and general manager of Intel Media, will be retained.
Verizon said the former Intel operation will become part of the FiOS organization. The OnCue platform is said to include advances in user interfaces, search and discovery, and cloud-based delivery that will be salient to multi-screen delivery not only on the FiOS network but also on Verizon’s wireless network.
Verizon CFO Fran Shammo said, "From a FiOS customer perspective we expect the benefits that they will have more elegant search and discovery interactivity and cost screen, ease of use but also keep in mind with the acquisition of Verizon Wireless and becoming 100% ownership of that we also plan to take that platform and integrate it more deeply with our Verizon Wireless 4G LTE network. So that really was the strategy behind this. As far as we enable this platform to take us over the top obviously we have our video digital media services that we have been working on for 2.5 years, we have just made two acquisitions related to that platform. So look I mean we’re positioning ourselves strategically to be in a position to competitively compete around the whole mobile first world and video. So I think that’s where we are." The comments were from the transcript of Verizon's call with analysts, provided by Seeking Alpha.
Intel CEO Brian Krzanich 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.”
The purchase of Intel Media complements Verizon’s acquisitions of the content delivery network (CDN) company Edgecast, and of upLynk’s technology that streamlines the process of uploading and encoding of video for live, linear and video-on-demand content.