Microsoft Xbox TV – will users pay to watch a service they already pay for?

September 18, 2011

Microsoft Xbox TV – will users pay to watch a service they already pay for? Just this past week at Microsoft’s financial analyst meeting, CEO Steve Ballmer announced plans to roll out a new service called Xbox TV during this holiday season. The service will be available on the Xbox 360 and will allow users to watch select streaming TV shows.

As reported by CNN, Ballmer did not provide a list of the content providers which is the most crucial detail during the meeting. Google and Apple have ventured down this path but faced resistance from content providers such as Disney, CBS, and Comcast.

According to David Wertheimer, executive director of the Entertainment Technology Center at the University of Southern California, Microsoft may go the route of using a “TV Everywhere” model, where users can watch shows they already pay for.

This means that if a user pays for ESPN, then they will be able to stream that show through their Xbox 360. Incidentally, this is what Microsoft is doing with ESPN already.

However, many question this model as why would customers want to watch the same content they may get over Verizon FIOS or Comcast Xfinity through their Xbox 360. Ballmer’s big selling point for the service seems to revolve around Bing voice search through Kinect.

Interestingly enough, it was rumored that Microsoft was set to announce this TV service at E3 this year but was scrapped for some unknown reason.

While the idea is interesting, the challenge will be in securing the content to make the service compelling, pricing and availability. In most cases streamed TV shows come out several days after broadcasting on live television.

According to Gartner analyst, Van Baker stated, “Search is not discovery. Search as an answer to discovery implies you know what you’re looking for. Most people have no idea what they’re looking for."

Baker indicated that discovery is what makes Netflix such a huge success as its complex recommendation system allows users to discover programs they may have never known about.

The service seems to still have some bugs, as an on stage demo of Xbox TV via voice command failed to work properly.

Ballmer joked, "It’s a good thing that’s shipping for Christmas."

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