updated 10:35 am EST, Mon November 29, 2010
Microsoft talking Xbox TV subscription service
Microsoft's plans for an Xbox TV service may have become more concrete through a leak on Monday. Two sources today said that it was in early discussions that would bring multiple networks in for a streaming service. The models Reuters understood had been mentioned included both a "virtual cable" that offered a traditional paid service online as well as an option that would grant free access to Internet-enhanced TV for those who have a cable TV subscription.
Any plans likely wouldn't take effect until at least a full year, the tips said.
Although overlooked by the news outlet, the project is believed to be the brainchild of former News Corp executive Peter Chernin, whose plan would modernize live TV. The plan hinted at earlier might carry a $1 or $2 monthly premium on top of an Xbox Live Gold account.
Microsoft has already had video rentals and purchases on the Xbox 360 and has subscription video through Netflix, but it hasn't had live TV apart from ESPN3 and video piped from traditional TV providers like Telus that use the Xbox as a set-top box substitute. The motivations are unknown but could revolve around catching "cord-cutters" who limit themselves to Internet access to drop a very expensive cable or satellite TV bill.
Legacy cable providers like Comcast and Time Warner have insisted that cord-cutting is a myth and that only the economy was to blame, but they have also begun testing very low priced plans that sacrifice some important channels to keep customers onboard, albeit with limitations.