Looking to join tech leaders Apple (AAPL - Get Report) and Google (GOOG - Get Report), Microsoft is exploring a pay-TV deal with media companies to deliver programming to Xbox users, according to a Reuters report Monday.
While the service could take as long as a year to put together, the final product will no doubt be seen as yet another attack on the cable industry and the big-ticket TV programming packages. The Xbox game console makes for an easy entry for Microsoft since the device is already connected to the Internet and the TV.
Microsoft is the latest tech shop to start discussions with Hollywood and the TV industry over terms of show sales, rentals and distribution.Apple has high hopes that people will rent programs and movies through iTunes on its Apple TV box. And Google, with partners including Logitech (LOGI) and Sony (SNE), launched Google TV, a system that combines the Internet with the home TV. The studios have not exactly rushed into these deals. Outfits like Hulu, which is jointly owned by NBC Universal, News Corp (NWS) and Disney (DIS), have blocked programs to Google TV, with an eye toward offering its own video package. Add together choices of streaming TV shows to a selection of online movies from Netflix (NFLX - Get Report) and Amazon (AMZN - Get Report), and suddenly consumers can act as their own TV programmer and bypass the cable company. At least that's the threat Comcast (CMCSA), Time Warner Cable (TWC) and Cablevision (CVC) face, but the promise of Net TV has been a long-running disappointment. Microsoft knows this rerun well. As the provider of early and failed Web TV effort, Microsoft helped usher in the era of high expectation for so-called Internet and TV convergence. But past failures have not discouraged Apple, Google and even Microsoft from giving it another try. --Written by Scott Moritz in New York.
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