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Intel reportedly ponders a new interactive TV service

The chipmaker wants to use facial-recognition technology to more accurately target ads to viewers -- but media companies don't want to risk disturbing their business models, Reuters reports.

Intel reportedly wants to kick off a new interactive TV service this year, though media companies aren't yet sold on the idea, Reuters reports.

The new service would use a set-top box with embedded Intel technology and tap into facial recognition to figure out who's watching, according to the report, which cited "sources who have been negotiating with Intel." Reuters said such a feature could allow advertisers to better direct their ads to specific genders and age groups.

But Intel wants to unbundle and license specific networks and TV shows at a discount to what cable and satellite companies pay. That notion is proving to be a stumbling block for media providers reluctant to cut special deals with the chipmaker.

Intel believes its new TV service could offer more accurate metrics than those provided by the Nielsen ratings, which many content providers see as outdated in today's digital climate, Reuters added. As such, the financial value derived from more targeted ads could offset the cost of the licensing fees for TV content.

"They've told us the technology is going to be so much more interactive with ads that you can make more money. But it's just a little unproven," said one executive involved in the talks with Intel told Reuters.

To help in the negotiations, Intel has enlisted the aid of several TV industry professionals. But the basic issue remains: Intel doesn't want to pay a premium for content, while TV companies don't yet see any incentive in discounting their programs to Intel for an unproven technology.

Despite the challenges, Intel is aiming to launch the service by the end of the year, sources told Reuters.

CNET contacted Intel for comment and will update the story when we get more information.