As expected, Verizon Communications is planning to acquire the assets of Intel Media, including the OnCue cloud TV platform, from Intel Corp.
Verizon said that it plans to use the business division to develop and integrate next-generation video services into its Verizon FiOS IPTV offering, including what it calls "elegant" search and discovery, interactivity and cross-screen ease of use – integrated with the Verizon Wireless 4G LTE network.
It will also leverage the assets to further develop its over-the-top (OTT) efforts, which for now include the Redbox Instant offering.
Terms of the transaction were not disclosed.
It also said that it will "make employment offers" to the entire 350-person Intel unit, which will continue to be based in Santa Clara and be led by its existing management team.
"The OnCue platform and team will help Verizon bring next-generation video services to audiences who increasingly expect to view content when, where and how they want it," said Lowell McAdam, chairman and CEO of Verizon. "Verizon already has extensive video content relationships, fixed and wireless delivery networks, and customer relationships in both the home and on mobile. This transaction provides us with the capabilities to build a powerful, capitally efficient engine for future growth and innovation. We will have the opportunity to enhance, expand, accelerate and integrate our delivery of video products and services to better serve audiences on a wide array of devices."
Brian Krzanich, CEO of Intel, said the deal makes sense given Intel and Verizon's combined capabilities: "Intel Media's over-the-top TV products are truly innovative and under Verizon's ownership have the potential to change how people interact with content," he said. "The critical factor in gaining efficient access to content is based on your ability to scale quickly in subscribers and end users, which is why selling these assets to Verizon makes perfect sense, with its millions of FiOS network and wireless customers."
Intel, for its part, will put the failed OnCue experiment behind it (it had planned to offer à la carte TV via its own set-top box), and will instead focus on its core business of computing products.
For Verizon, the acquisition continues its trend of buying and bringing in-house video expertise. In December, it announced a definitive agreement to acquire EdgeCast, a specialist in content delivery networks. Also in fourth-quarter 2013, Verizon announced the acquisition of upLynk's technology, which streamlines the process of uploading and encoding of video for live, linear and video-on-demand content.