Microsoft Enters TV Market with Xbox-Based Subscription Service

Strategic Insights -

Microsoft is set to re-enter the TV market with a subscription-based service on its Xbox gaming console, aiming to compete with Google, Apple, and Netflix. The software giant has held talks with TV networks to create a service that would provide access to networks such as ABC, NBC, Fox, CBS, ESPN, and CNN for a monthly fee. The service, which could launch within the next 12 months, would offer interactive functions and programming packages, including sports and children's shows, and would allow customers to purchase individual channels.

Key Takeaways:

  • Microsoft is planning to launch a subscription-based TV service on its Xbox gaming console, rivaling efforts by Google, Apple, and Netflix.
  • The service would provide access to networks such as ABC, NBC, Fox, CBS, ESPN, and CNN for a monthly fee.
  • Interactive functions, such as messaging with friends while viewing shows, are being considered as part of the service.
  • Programming packages, including sports and children's shows, are being explored, as well as individual channels such as HBO and Showtime.
  • Microsoft is exploring the possibility of creating a "virtual cable operator" service.
  • Cable subscribers would be able to use the Xbox to watch shows with added interactive features.
  • News Corp's Chief Operating Officer, Chase Carey, believes that alternative TV services like Microsoft's could provide new opportunities for cable and broadcast networks to reach fragmented audiences.

Statistics:

  • According to Reuters, the pay-television industry is facing concerns that consumers are fleeing expensive subscription packages for cheaper online services operated by companies such as Netflix and Hulu, which charge $7.99 per month for streamed shows and movies.
  • The phenomenon of "cord-cutting" has raised concerns that over-the-top services could undermine the lucrative cable TV industry.
  • Pay-TV networks such as ESPN earn revenue from both carriage fees paid by pay TV operators and ads.
  • Cable networks would welcome new types of competition to the cable and satellite companies.

Sources:

  • Reuters
  • Muscat Press and Publishing House SAOC 2009
  • Albawaba.com
  • Syndigate.info