Microsoft may be trying to create a “cord-cutting” over-the-top TV service by selling access to networks’ programming through its Xbox system, Reuters reports, citing unidentified services. So far, Microsoft appears to be in the early stages of talks with programmers about its planned service, which would be at least a year away from being introduced to the public.
Microsoft is considering a range of possibilities for becoming a “virtual cable operator.” The basic scenario would call for Microsoft charging Xbox users a monthly subscription as part of an internet streaming service, similar to other over-the-top providers like Boxee. It would also consider participating in the “TV Everywhere” concept by using Xbox to authenticate current cable subscribers and allowing them to watch shows through its interactive system.
In that case, Microsoft would establish “content silos” by selling individual channels such as HBO or Showtime directly to its users. The company is already doing that with ESPN on the Xbox Live online service.
Microsoft’s exploration of expanding its video services comes as Google and Apple are getting attention for their respective efforts to offer subscription TV programming through internet-based systems. At the moment, both are experiencing some resistance from programmers. While it seems that Microsoft may be a little late in jumping into the pay TV space that its rivals have already entered into, considering the disputes about the actual amount of cord-cutting going on, timing its service a year from now might be the better bet, as consumers and content companies warm up to the idea.
1 Comments
November 29, 2010
This has the potential to be a huge revenue generator for Microsoft. We all remember the comments when Microsoft initially launched the Xbox and that it was their "trojan horse" to get the PC into the living room. Time has shown that not to be the case.
But they got closer with the launch of Xbox Live and then MUCH closer with the Xbox 360. The recent enhancements to add Netflix streaming, Zune videos, and ESPN move them further into that cable competitor realm.
It's easy to imagine Microsoft doing what a cable/satellite company never would. Namely, offering a al carte subscriptions to certain channels for an annual fee that is tacked onto a GOLD subscription. If I could purchase a GOLD membership with ESPN 1 and 2, Comedy Central, Bravo, HBO, and local channels for a reasonable price (emphasis on "reasonable"), I'd cut the cord to my cable box immediately.
Cable offers some bells and whistles Microsoft may not (e.g., Tivo DVR, multi-room viewing), but the potential here is too much to ignore. Very interested to see how these discussions progress!