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Intel testing TV service with employees in three markets

Eric Free, vice president and general manager for content and services at Intel Media, also tells CNET he believes 2013 is the year that over-the-top video service really takes off.

Intel wants to make a TV offering with more capabilities than even the Google TV pictured here.
Intel employees will be the first users to test the company's new TV service, as the semiconductor giant preps for a rollout later this year.

Eric Free, vice president and general manager for content and services at Intel Media, told CNET today that Intel is conducting closed trials of its product with Intel employees in three West Coast markets.

He didn't provide many other details but predicted that 2013 will be the breakout year for OTT, or over-the-top, video -- services such as Hulu that deliver video over the Internet, eschewing cable providers and satellite services.

"There have been lots of fits and starts in terms of taking pay TV to the Internet," Free said. "This is the year that things will change and get serious."

Free cited three main reasons why over-the-top video will boom this year. Consumer behavior is changing, with many people cutting the cord (or never paying for TV in the first place), and technology has improved to the point where Internet-based TV is possible. In addition, companies have become more comfortable with the Internet and have "learned enough to know where the business is going and what bets to make in terms of the next model," Free said.

Of course, a big reason Intel believes Internet-based TV services will take off this year is because it's launching its own product later in 2013. The company hasn't yet provided specific details about its offering, including pricing or availability, but it has said it will provide hardware and services directly to consumers. The offering will let users watch live TV, on-demand, and other content.

Intel employees will be testing the service as the company gets ready for its broader rollout.

Intel doesn't plan to significantly cut down a user's cable bill with its new offering, but it expects to attract users by providing more curated content. Free noted that Intel isn't targeting "economic cord cutters," people who drop cable to save money, but is looking to attract younger, tech-savvy users looking for new digital alternatives.

Free said Intel's product should "grow the pie" for content providers by expanding their distribution. He declined to provide information about the content side of Intel's offering but said the company has "been engaged with everybody" and believes it will have a "great" offering at launch.

"Ultimately a better experience is what consumers want," Free said. "Why not deliver something that's modern, interactive, and beautiful versus traditional TV?"