Intel Announces $200M Web Broadcast Network

In an effort to broaden its sales beyond microprocessors, Intel (Nasdaq: INTC) announced plans Thursday to build a $200 million (US$) streaming media business that will allow customers to broadcast anything from financial briefings to feature films over the Web.

Although most U.S. homes with Internet access still use dial-up connections, the number with high-speed connections is expected to increase rapidly from the current total of three million. “The increased availability of broadband connections to the Internet is starting to create significant markets for using those connections for streaming media,” said Peter Christy, an industry analyst for Jupiter Communications.

The Internet Research Group estimates that the streaming media services market will grow more than twenty-fold to $2.5 billion by 2004. Intel’s move is designed to garner a large share of the hot new market, and as an added bonus, the company may see increased demand for its main product. In order to receive and play the streaming media content, users will need high-speed chips to power their computers.

“When you get a DSL connection or a cable modem connection, there’s a lot of interesting things you can do that require a more potent chip,” said Christy. “If by investing in this they can invigorate the market for high-end personal computers, it’s certainly in Intel’s best interests to do that.”

On the Edge

Intel plans to build a global and scalable network around digital broadcast operations centers that feature Intel’s network intelligence technology.

The system is designed to stream content around the “edges” of the Internet in order to bypass bottlenecks that can delay and degrade it. Intel says its network will be capable of handling thousands of simultaneous live events.

Intel began deployment of the new service in February with the delivery of streaming audio and video to customers.

The company will enter the second phase of deployment this summer by activating a 70,000 square foot broadcast operations center in Portland, Oregon, which will receive, encode and host providers’ content using digital processing. A second center will be activated in London by the end of the year.

Customers Already On Board

The new company already has numerous heavy hitters among its customers, including Nasdaq.com, the Fox Family Channel, FoxKids.com, and the Investor Broadcast Network.

Intel Internet Media Services is also working with several companies to develop a “full range of complementary services that will help content providers take advantage of new revenue opportunities in delivering audio and video content online.”

The partners include Microsoft, DoubleClick, RealNetworks, and PacketVideo. McLeodUSA, iXL Live, Loudeye Technologies, Inc., ImaginOn, MediaOnDemand.com, theDial and POPcast Communications also announced their support for the Intel platform.

Intel is allying with network providers, such as InterNap, Teleglobe Communciations Corporation, and Williams Communications, and with satellite-based content delivery network Cideara. The company has formed broadband alliances with Rythyms, NetConnections, Inc., Northpoint, and New Edge Networks, as well.