The company has reportedly held talks with several media companies about acquiring content for a pay-television subscription service that would stream through the Xbox 360 dashboard. The service, assuming it comes to pass, isn’t expected to launch for roughly one year.
Talk of Microsoft launching its own channel first surfaced in April, when the company and former News Corp. president Peter Chernin discussed a channel that would air both original and television content. Around that same time, Conan O’Brien reportedly considered moving his show to the Xbox before deciding to go with TBS.
The latest reports, which come from Reuters, seem to indicate the plan has evolved somewhat. Microsoft is reportedly discussing a number of options, including creating a “virtual cable operator” that would be delivered online. The company could also use the 360 to authenticate cable subscribers to watch shows – similar to its current deal with AT&T’s Uverse.
The Xbox 360 already has a separate channel for content from Disney’s ESPN 3 – and the company could also create individual channels for other providers.
Microsoft took an early leadership position in non-gaming programming this console generation, incorporating Netflix into the Xbox 360 long before its competitors – as well as other services such as Last.fm. In recent months, though, Sony’s PlayStation 3 has shown tremendous progress on that front, adding content from Hulu Plus and BBC America while Microsoft has been slow to react.
The move would put Microsoft in competition with other set-top box providers, including Apple TV and the struggling Google TV. The STB market is growing fast and content providers (and cable companies) continue to worry about cord cutting – consumers canceling their cable packages for a la carte programming.
Should that happen, it could fundamentally alter the broadcast world.
“We’re all concerned about over the top video delivery because ultimately what sustains this industry is a bundled model – the ability to build a linear channel,” said John Landgraf, president and general manager of FX at a recent Variety Entertainment and Technology Summit. “I … don’t believe a purely a la carte business will function. It simply will not function. It will not sustain quality programming."