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Tuesday, November 7, 2006

X-Box Movie / TV Download Business Model Announced
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Last week over on IP Central I wrote about how excited I was to learn that Microsoft would soon be announcing an eagerly awaited movie / video downloading service for its XBOX 360 gaming console. And now we have the details of their new business model. And, in my opinion, it looks like a winner for MS, content developers and consumers alike.

Beginning on November 22nd--the second anniversery of the XBOX 360 launch--XBOX users will be able to use their "Microsoft Points," which can be earned or purchased on the XBOX Marketplace, to download movies and TV shows from affiliated partners. The first round of deals MS cut were with CBS, MTV Networks, Paramount Pictures, Turner Broadcasting System Inc., Ultimate Fighting Championship (UFC), and Warner Bros. Home Entertainment.
More deals are sure to follow, but that's quite a bit of content already. I look forward to downloading Comedy Central and VH1 shows in particular, in addition to all the movies they'll be offering. And my kids will love all the Nickelodeon and Nicktoons stuff that is on there. (A list of all the content companies involved in the deal can be found here).

Movies from these providers can be rented via the 360 for a 14-day period, but videos and TV shows can be purchased and retained. (Get ready to fill up that 20-gig hard drive quick!) No word yet on the exact pricing , but expect it to be on par with what Apple and others charge for movie and video downloads. Importantly, for those of you who are obsessed with audio and video quality (like me), you will be happy to see on the snapshots below that the 720P high-def downloads are optional (for a small additional fee) and 5.1 surround sound is standard for those HD videos. I am in heaven.

Engaget.com gives us a sneak peak at some of the navigation menus today. The first one shows how a movie download will work and the second one shows the confirmation of 14-day rental agreement.



This is really exciting news for XBOX 360 owners. There was a time in my life that I used to laugh at the suggestion that Microsoft would ever be able to elbow their way into my living room. And now, as I noted in this previous essay, I'm starting to use the XBOX as the primary entertainment device on my rack of A/V hardware. I'm using it to watch movies, listen to music, download pictures of my kids, and, oh yeah... play games too!

Finally, I think that this is a great business model that copyright owners can tap to get their content out to consumers while also receiving compensation for their creations. I suppose some will complain about the DRM restricting usage to just the XBOX or MS / Windows devices, but I don't give a damn about that. I can live with certain usage restrictions if all this great content is being delivered to me. I don't seriously expect to be able to transfer all this stuff over to my PlayStationPortable, PS3 (when I get it) or even an iPod. If we want to get great content delievered to us at a decent price we have to live with some restrictions on its use and transferability.

posted by Adam Thierer @ 3:52 PM | IP , Innovation , Mass Media

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I think what Microsoft is doing rocks. Years ago they entered the video game market and took over a very large portion of it... Now it seems they are poised to take on, or go head-to-head, with Comcast's "On-Demand" service.

Microsoft has sold 6 million units, in comparison to Comcast's 6.2 million customers who use its advanced digital services (which includes DVR and On-Demand). I think it will be interesting to compare the results of Microsoft's reported sales from the service, to Comcast's upcoming quartely reports. (Check out: http://www.cmcsk.com/phoenix.zhtml?c=118591&p=irol-newsArticle&ID=921791&highlight=) and (http://www.microsoft.com/msft/earnings/FY07/earn_rel_q1_07.mspx).

Posted by: Reggie T at November 9, 2006 1:03 PM

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