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Microsoft rumors of “Xbox TV” about as credible as “Apple TV”

We’ve heard it all before and this time the rumor has replaced the word Apple with the name Microsoft, but it’s essentially the same, saying that it w

By PETER WHITE

Published: 2 December, 2010

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We’ve heard it all before and this time the rumor has replaced the word Apple with the name Microsoft, but it’s essentially the same, saying that it will come to market as a virtual cable operator, delivering TV channels over the internet, in return for a monthly fee.

Let’s just examine that for a moment. Apple, with all of its revenues, profits and cash, not to mention devices and all round media vision, found that impossible to achieve when it re-launched the Apple TV earlier this year. It was clearly “in negotiations,” to do much the same and it would have been a very cool idea, but those negotiations never came to anything.

This rumor was dropped by Reuters and we’re sure it is true, but when was the last time Microsoft did an end run around Apple – about 1995 by our reckoning.

It’s in the consumers interest to get TV for what it’s worth and not pay for the support of a physical network, like that of a cable operator network or telco network, built into the price. It’s in the interests of the TV channels to reach more people and solve the problem of how they shift to the internet and make money from new sources. It would also lead to choice, and a rapid re-pricing of advertising supported content. The internet continues to grow advertising revenues rapidly and where better for TV to recover its weakening advertising punch.

Which is why Pay TV operators have to nip it in the bud. If you were Comcast or Time Warner Cable or Dish or DirecTV, wouldn’t you say to a TV channel, “Do that deal and I stop carrying you,” and create a choice for any cable network of measuring immediate loss of revenue from both carriage payments and advertising reach, against a long term potential gain, which is not guaranteed. If Microsoft is talking to the national broadcast networks in the US like NBC (no says Comcast its new owner) or ABC (over my dead body says its biggest shareholder Steve Jobs) or Fox and CBS, why would Microsoft get a different answer from them than Google, Amazon or Apple?

And could they survive legal and FCC scrutiny if they gave different answers to different companies offering different devices. Already the accepted route to get national broadcast networks is to simply include them in the way ivi and FilmOn has done and claim that since they are really a cable TV company, just using the internet for delivery, they have every right to pay paltry statutory licensing fees to the Register of Copyrights.

Reuters says the idea is for Microsoft to use the Xbox to deliver both national networks like ABC, NBC, Fox and CBS, as well as paid for channels like ESPN, HBO or CNN. We understand that it already offers parts of ESPN content on the Xbox network.

The natural extension to this is to somehow harness interactivity to the advertising or even to some of the programs. The typical nonsense was traipsed out about messaging with friends while you watch etc… which of course everyone does now using a separate device, you don’t need an Xbox for that.

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