Intel begs $500 million for its flailing OnCue streaming box project

Last month we told you about Intel’s plans to back-out of the over the top (OTT) video streaming business, setting up negotiations with Verizon Communications to sell its visionary cable/streaming box, OnCue. Now we know what Intel wants for its prized device: a cool $500 million. A report by Bloomberg sites unnamed sources who said Intel is asking for the hefty sum to recover the costs associated with developing its new service.

Intel’s OnCue system bypasses traditional cable delivery systems that require hardwired connections and territorial installation to provide both live TV and previously aired streaming content over any high-speed internet connection. The system would offer customers a tantalizing combination of TV, streaming apps, and apps for mobile delivery, all from a single delivery system that connects to your home’s network. Basically, it’s like a Roku that also offers cable.

That revolutionary design is partly what kept Intel from going forward with the service in the first place, however. The company was unable to secure deals with TV content providers for a number of reasons, not the least of which was providers’ concern that signing licensing deals with Intel could complicate their relationships with standard cable and satellite services. So OnCue was left without a key component to its grand design.

But Verizon’s Fios already has ties with those content providers, as well as with other competing cable services. And according to the report, the company could potentially find a way to amend its current deals to license content for the new OnCue service, thus extending the communications giant’s lengthy reach into whole new realms of the TV and streaming landscape.

Bloomberg’s sources also said that other potential buyers have been meeting with Intel to kick the tires on the OnCue system. Both Samsung, and international cable juggernaut, Liberty Global, have purportedly met with Intel about purchasing the system, though it appears Verizon is still the front-runner.

It’s unclear whether Intel will be able to get its mammoth asking price, but the company is reportedly looking to unload the system by the end of the year, so it may be ready to deal. Intel also plans to do what it does best once the sale is finalized, providing the chips that run the OnCue device to whichever company makes it rain.

The acquisition of OnCue by any one of the three companies now in the running will no doubt have strong repercussions in the world of streaming media, and therefore, for all of us. Verizon’s cozy relationship with competing cable providers could handicap Intel’s original vision for the device, while London-based Liberty Global would purportedly take OnCue, well, global. And Samsung…well, who knows. It already has the TVs, right?

At any rate, if Intel can accomplish its goal by year’s end, the long awaited implementation of the OnCue system could be close at hand. We’ll keep our eyes peeled on this evolving story, so stay tuned to find out what happens next.