Interest Strong in Microsoft’s Xbox Plan

Major content providers expressed strong support and interest in Microsoft Corp.’s plan to integrate its IPTV software for telcos into its Xbox 360 gaming console, viewing it as an additional delivery channel with little if any downside.

The software vendor announced the initiative, which will not bear broad fruit until near the end of the year, in the opening keynote at the 2007 International CES in Las Vegas.

While a top U.S. customer, AT&T Inc. would not divulge whether it would implement the combined product, content providers wasted no time lauding the offering, perhaps not fully-aware of what service providers may need to do to roll it out.

“It’s the perfect device for TV with its high-resolution and high-quality,” said Jim Funk, marketing vice-president of Akimbo Inc., which has 13,000 programs, initially delivered over the Internet. The content company already provides programming for AT&T Homezone, a satellite-based IPTV service combined with high-speed Internet service from Yahoo.

“The hard part with devices is getting the installed based, which in this case, is already taken care of,” said Joseph Cantwell, vice-president of marketing for advanced services for Starz Entertainment. Starz delivers movie content through cable systems, satellite providers and the Internet.

Cantwell said his firm would have to do some unspecified “reworking of code around the movies” to deliver it through the planned Microsoft all-in-one entertainment device, but emphasized that did not include changes to digital rights management technology as it already works with and uses the vendor’s media center scheme.

When asked if the distribution channel was a good match for content such as movies, Cantwell said Xbox 360 gamers already spend a great deal of time on the system, typically have broadband connections and are already used to downloading content like games.

“I expect gamers will buy movies and other content,” said Cantwell.

Starz hopes so as its booming business today is in movie downloading and burning. His company’s research shows that half of their movie rental and sale customers don’t currently subscribe to a premium TV service.

“It’s a just plain awesome channel,” said Sean Besser, vice-president of business development for Movielink, which is a joint venture of four content houses charged with pushing programming for pay over the Internet to consumers. “There are not technical, business or legal issues,” he said, adding that, like Cantwell, his content can already be accessed via Microsoft’s media center capabilities.

“Microsoft has been placing some big bets on video,” said Besser. “We need to work closely with them to ensure we’re clear with where they’re headed.”

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