Report: Intel Eyeing Pay-TV Market

According to a report from The Wall Street Journal Monday, Intel is developing a virtual cable operator that would broadcast U.S. TV channels over the internet and allow users access to shows and video content from any internet-connected TV, PC, or mobile device. The chip giant has been pitching the idea to media companies for "several months," the report said, citing people familiar with the matter.

As part of the initiative, Intel would introduce its own Web-hosted set-top box to stream the pay-TV service, along with an interface for users to browse and select TV series. The Journal said that Intel told media companies it is aiming to unveil the service before the end of the year.

[Related: Intel’s Dallman Says BYOD, Mobility Offer New Opportunities For Partners ]

An Intel spokesperson declined to comment.

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The Santa Clara-based chip giant would face a number of hurdles before officially launching the cable service, T The Journal said. For starters, the implied programming costs for Intel could be huge. Existing cable companies pay approximately $38 billion a year to license TV channels, and these costs are on the rise.

Internet bandwidth is another potential obstacle, according to the report. Similar initiatives have been taken on by other technology companies in the past, but have been abandoned because of the companies’ inability to provide sufficient bandwidth for constant video streaming.

Obstacles aside, other tech giants including Apple and Google have made their way into the "Smart TV" space over the past few years. And, although the services side of market may be new to Intel, the company’s chips can already be found today powering set-top boxes from companies including Comcast, Sony, and Logitech.

Intel’s debut within the virtual cable market would appear to be part of the chip maker’s larger initiative to broaden its product portfolio beyond its traditional PC and server offerings. Its new Atom line of "Medfield" mobile processors, which will hit the market this year in smartphones from Lenovo and Motorola Mobility, has also been pointed to as a new marketing opportunity for the company.