Microsoft is reported to have held talks with major broadcasters to launch a new online pay-television subscription service through its Xbox video game console, according to Reuters, citing two persons familiar with the situation.
The talks took place late last year, said the report. From the story is is not quite clear what the plan exactly is, except that Microsoft has proposed a range of possibilities in these early talks including creating a “virtual cable operator” delivered over the internet for which users pay a monthly fee.
Other options include using the Xbox to authenticate existing cable subscribers to watch shows with enhanced interactivity similar to how pay-TV operators have sought to do over the web, said these people to Reuters.
Microsoft is also exploring the possibility of creating content silos and selling more individual channels directly such as an HBO or Showtime. So far, Microsoft has signed a few TV content deals in the US for its Xbox 30, including a successful offer from Netflix and content from ESPN.
In Europe, the company has recently announced a deal with the Canal+ Group in France to stream all their premium channels as well as the CanalSat bouquets via the game console to the TV set.
This makes Microsoft an OTT provider of streaming TV channels and on-demand services in France, but lacking the basic offer of public and private channels. But that could easily be overcome by adding a DVB tuner to the set, making the Xbox a hybrid TV device.
Sony has also been very active positioning it PlayStation 3 game console as a hub for connected TV services. The Japanese company already introduced a DVB-T tuner called Play TV as an add-on to the console.
In theory, games consoles such as the Xbox 360 and PS3 are in a very good position to act as an over-the-top provider, but so far the idea hasn’t taken off with consumers on a mass market scale.
And the question could also be posed – is Microsoft the right company to achieve success in the world of interactive TV? So far, all their projects have failed. Who remembers Web TV? A small US start-up, in which Dutch CE manufacturer Philips was also a minority investor, which aimed to bring the world wide web to the TV set. An attempt to sell the service as MSN TV to (elderly) people without a computer failed.
Then there was Microsoft TV, which would bring full interactivity to cable networks. At least, that was the plan and one UPC was planning to introduce in the late 90s. They never did – except for one operator in Portugal in 2001. And French company Alcatel tried to sell their early IPTV products bundled with Microsoft TV software. The idea evolved in Multiroom – as used by AT&T’s IPTV service in the US.
Another go at the TV market was the concept of Windows Media Center, which involved having a built-in analogue TV tuner (!) in the PC. By doing so, it tuner the computer into a de facto TV set with PVR. The idea wasn’t so bad, but until now, it didn’t catch the consumer’s imagination.
Can Microsoft be successful this time? We are not so sure – especially when we look at the cold reception Google TV is getting from the established forces in the entertainment world. For them, one Apple and iTunes store seems to be enough. No more out-of-left-fielders, if they can help it.