IP Democracy: Microsoft Finally Opens its Xbox Trojan Horse

For years Microsoft has been messing around with crummy TV set-top middleware when, for most of the time, it had the ability to say “screw it” and bypass cable operators and phone companies altogether. Microsoft has the Xbox, the hot video gaming platform capable of connecting to both the broadband Internet and the TV set.

Finally, the software titan has acted upon its capabilities — last night Microsoft announced deals with a slew of TV programmers to reach viewers directly through its nifty little Trojan horse. The company announced pacts with CBS, MTV Networks, Paramount Pictures, Turner Broadcasting System, Ultimate Fighting Championship, and Warner Bros. Home Entertainment to deliver over 1,000 hours of programming via the Xbox. (For a full list of offerings, check out the Xbox “Marketplace.”)

I would very much like to have been a fly on the wall at the breakfast tables of cable chieftains everywhere to see their reactions as they read this news. For the first time ever, a powerful company with a popular device is capable of delivering to the TV set the same video they do — all over their cable modem connections, no less. The video content will be available through Xbox Live, which directly connects to the Internet via the cable operator’s (or phone company’s) broadband services.

Comcast’s cool on-demand delivery of hit broadcast network shows such as “CSI” is no longer the sole domain of the nation’s top operator — Microsoft can ship (once again, over Comcast’s own network) that program to Xbox owners, along with “Survivor” and “South Park” and the “Chappelle Show” and dozens of other popular programs.

Pay-per-view purchases of recently released Hollywood films are no longer the exclusive domain of cable (or satellite or telco) operators. Microsoft can sell and ship “Nacho Libre” to an Xbox owner (need I say it again — over Comcast’s own network), which is one less pay-per-view transaction that might go to cable.

More importantly, Microsoft has managed to bring Internet video to the TV set in a totally viewer-friendly way — the Xbox will even support high-definition programming. (Ryan Block at Engadget has a series of screen shots that depict the video menu options on the Xbox.) Although there are about two million Xbox’s are out there now, it’s only a matter of time before they proliferate to ten million, twenty million and more, particularly now that the platforms can be used for watching on-demand video and can, therefore, appeal to so many more people than just teenage boys.

Microsoft is not alone in its ability to bypass cable operators and phone companies. Sony’s even more popular PlayStation (the PS3 will soon hit the shelves) has all of the Xbox’s capabilities and more. Surprisingly, Sony, with its deep reach into the movie, music and TV programming businesses, has been slow to capitalize on its own trojan horse capabilities. Now that its gaming arch-rival has broken through some kind of barrier, you’d better believe Sony will get on the stick.

Trust me on this one. The cable industry is flat-out enraged over this development. Talk about net neutrality — if Google’s schlumpy video service prompted some cable executives to start thinking about tiered Internet access, what ideas do you think Microsoft’s programming pacts have spurred?

Posted by Cynthia Brumfield on November 7, 2006 10:06 AM to IP Democracy