Parks Associates Blog

Tuesday, December 07, 2010

Microsoft eyes leap back into TV: sources

Microsoft Corp is about to jump back into the TV game. Only this time, it may aim at cable, satellite and phone companies.The software powerhouse has held talks with TV networks to create a new subscription-based TV service on its Xbox gaming console that would rival efforts by Google Inc, Apple Inc and Netflix Inc, sources told Reuters.

Microsoft's latest explorations after investments in MSNBC and WebTV come as efforts to redefine living room entertainment have accelerated in the past year, with technology companies seeking to offer lower cost alternatives to pricey pay-TV subscriptions.

One scenario under consideration by Microsoft is to create a new TV service on its Xbox gaming console that would establish a "virtual cable operator." The service would charge a monthly fee for access through the Xbox to networks such as ABC, NBC, Fox, CBS, ESPN or CNN, according to two sources familiar with the plans.

Other options include allowing cable subscribers to use the Xbox to watch shows with more interactive functions. Viewers could, for instance, message with friends over the console while viewing their favorite shows.

News of Microsoft's plans come as the pay-television industry are moving to allay investor concerns that consumers are fleeing expensive subscription packages for cheaper online services operated by companies such as Netflix Inc and Hulu, which both charge $7.99 per month for streamed shows and movies. The phenomenon is called "cord-cutting."

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