Intel may be asking for $500 million for OnCue, its aspiring over-the-top video platform, but the company will have a hard time landing it, said a source who is familiar with the chipmaker’s plans to unload it.
Bloomberg reported Monday that Intel is seeking $500 million for OnCue, a subscription TV service tailored for broadand connections that’s been under development but, according to sources, unable to secure enough programming rights to create a compelling product. Intel Media’s project is also said to have lost the backing of new CEO Brian Krzanich.
Intel and Verizon declined to comment on the latest round of M&A speculation involving OnCue.
A source familiar with the plan has confirmed reports that Verizon Communications is interested in buying the assets, adding that the telco has likewise urged Liberty Media, albeit unsuccessfully, to make a joint offer for OnCue.
Verizon, the source added, is not willing to pay anywhere near what Intel is asking, considering OnCue’s primary assets include intellectual property but not much in the way of content distribution rights, the source said.
“There’s zero chance that Verizon will pay that price,” the person said, noting that the telco might be willing to pay a figure that’s “definitely below $300 million.” The price on the OnCue assets remain a major “sticking point” in the negations between Intel and Verizon, the person added.
There are also conflicting opinions regarding how Verizon would wield the OnCue assets. According to Bloomberg, OnCue would help Verizon sell pay-TV services outside its FiOS TV footprint, adding that the telco has asked media partners if Verizon would need new contracts or if its existing ones would need to be amended in order to deliver an out-of-footprint video offering.
A source who is familiar with Verizon’s interest in OnCue told Multichannel News that delivering services over-the-top outside of the traditional FiOS TV footprint “is not a near term plan” for Verizon, but that it would instead use those assets initially to accelerate its IPTV upgrade plans and rapidly establish an equivalent to X1, Comcast’s new cloud-based platform.
