The new alliance between Apple Computer and Intel will reverberate through Silicon Valley, and it will likely make waves in Hollywood, too.
PC companies and software makers have for years been negotiating with major film studios to allow consumers to receive, swap and share movies and other premium content around the home. The studios have become much more open to adapting their products to home networks in recent years, but fears about piracy and control over content remain. As a result, many video-on-demand companies, such as Akimbo, don’t deliver films that were recently shown in theaters; instead, they offer consumers fishing shows and cable cast-offs.
However, the newfound partnership between Apple and Intel—on Monday, Apple is expected to announce that it will begin adopting Intel chips in its PCs in 2006—could win the cooperation of the entertainment conglomerates.
Apple paved the way for legitimate music sales over the Internet through the iPod and its iTunes music site. iTunes’ technology, and the contractual terms behind it, have become something of an inspiration, if not a template, for further deals. Since iTunes, several other companies have launched efforts to sell songs online.
Intel, meanwhile, has expended extensive energy to woo Hollywood to IT technologies. The company sponsors the Producers Guild Award dinner, for instance, and broadcast a film over WiMax at this year’s Sundance Film Festival. Actor Morgan Freeman has made cameo appearances during keynote speeches by Intel execs. Later this year, Revelations Entertainment, started by Freeman and run by engineer Lori McCreary, will release a film simultaneously in theaters and on the Internet.
Just as important, the chipmaker has been a prominent member of many industry consortiums, including the Digital Home Working Group, geared toward creating digital-rights management systems and other technologies that will pave the way for consumers to swap video between devices. Intel has also tried to promote the EPC, a living room PC that functions as a server and storage device for music, games and video.
Negotiations with the film studios have been painful, but do progress. “The whole industry is turning about,” Louis Burns, an Intel vice president, said last October when he ran the desktop products group. Two years ago, the studios and electronics companies went after each other “with pointed sticks,” he added.
Last month, Intel CEO Paul Otellini said that many of the major points of disagreement between the film studios and the PC industry over passing movies around on PCs have been worked out. Studio executives have also hinted that video-on-demand experiments could begin later this year.
Cooperation between the two companies could also finally make the portable video player a success. Apple has been working with Taiwanese contract manufacturers for the last year on a portable video player. Intel has designed several of these units, which later got sold by outfits like Sonicblue. Right now, however, sources have not said Apple and Intel are working on these products. Instead, they have said Apple will adopt Intel chips in its PCs.
