(.redherring.)- - AOL and Intel launched an on-demand entertainment service Monday, combining the recently revamped AOL Video service with Intel’s Viiv consumer electronics technology.



The service provides 45 channels of video content that users can watch on their PCs, or on large-screen TVs in their living room connected to Viiv PCs and a remote control. AOL and Intel say the video is DVD-quality so it won’t look grainy on a large-screen TV.



In addition to the 45 channels of TV shows and other types of video, the service also includes the downloadable movie service that AOL introduced in August with AOL Video (see AOL Offers Movie Downloads).



The channels also include music videos, concerts, and sports. AOL, based in Dulles, Virginia, has also developed a search engine to search for millions of videos across the web with the service.



The user interface allows users to decide whether they want to search the entire AOL Video library, browse a video category, or watch a video from AOL’s recommended viewing list, via a TV remote control.
Shares of Intel rose a dime to $19.61 in recent trading, while shares of AOL’s parent company Time Warner climbed $0.15 to $17.17.



Lean-Back Video Control

Intel launched its Viiv PCs in January at the International Consumer Electronics Show in Las Vegas (see Intel: Chip Maker to Video Firm). The Santa Clara, California-based chip maker announced its partnership with AOL at the time, but they didn’t spell out the details until Monday’s announcement.



“What Intel is doing is building some brand equity exactly like they did with Centrino,” said Fred McIntyre, vice president of AOL Video. “They used wireless to centralize the marketing with the Centrino laptop chip. With Viiv, they have a next-generation chip for desktops, and they are differentiating it with video. It’s a better chip for video than the desktop PC you have in your office.”



The service will include on-demand news clips from Reuters, CNN, CBS, and the Weather Channel, thousands of movie trailers, and lots of classic television programming on an ad-supported basis from AOL’s In2TV service.



The service also features pay-to-download content from Sony, MTV, Comedy Central, A&E Biography, the History Channel, and Logo, all viewable the way they would be on a TV set.



“We’ve got a full range of programming available in a portal experience,” said Mr. McIntyre.



AOL has also created a site called Digital Lifestyle to educate consumers about digital media consumption in the home through devices like the Viiv PCs. Intel is providing a multimedia blog for the site called My Plugged In Life.



“AOL Video is the best example to date of a portal that takes all the best of the Internet content and brings it all together in a really high-quality format that looks great on a big-screen TV,” said Gordon Dolfie, director of marketing for Intel’s content services group.



He characterized the service with AOL Video as a “lean-back experience” that will enable users to find content with a remote control and deliver it to a TV, handling the digital rights management, and converting the video so it will look like a DVD on the TV set.



“It’s like content you buy on a shiny disc in the store, and now you can get that from the Internet,” he said.