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Investors should keep tabs on Verizon's negotiations with Intel to see if Verizon acquires the OnCue Internet-based TV services. If the deal goes through, investors should pay attention to how Verizon plans to use the OnCue services. Bundling OnCue services with Redbox Instant would incentivize subscribers to use Redbox services as a complete TV and movie entertainment package. Outerwall would greatly benefit from such a bundle because more Redbox users translates into expanding revenue. Also, additional offerings under the Redbox name will improve the company brand.

OnCue would be a good addition to Verizon because the company is already in the content business with Redbox Instant and FiOS TV. The question is whether Verizon can negotiate a good deal with Intel. The OnCue service would work well bundled with FiOS and Redbox Instant, or left as a stand-alone product.

The features of this service resemble those of a DVR, but the main difference is every show is recorded and available at any time. The OnCue hardware and services are currently being beta-tested by Intel employees and select users.

Intel executives, who have promised to launch a Web-based pay TV service by the end of 2013, are now looking for a strategic backer to help them fund and distribute the service. If they don’t find one soon, it’s possible the project will be scrapped.

or Internet-based TV to be a competitive option, it either needs to be cheaper than cable and satellite or it needs to provide the content that subscribers want in a better way.

For the companies still working on Web TV, it would mean charging less than traditional competitors for a service while paying more than traditional competitors to offer it.

for a Web TV offering to be truly Web TV, it would need to offer all the channels consumers want alongside the "over-the-top" video capabilities like Netflix and Hulu that they associate with Internet viewing.