Xbox TV service grinds to a halt, high licensing costs to blame?

By Gary Johnson - Jan 12, 2012

Even though a lot of news recently has been about the next gen consoles, the current models still live on and continue to do well. Both Microsoft and Sony are adding new features all the time with firmware updates. Today though we have news that the Xbox TV service supposedly grinds to a halt, so are high licensing costs to blame?

It is being claimed that the company has put a halt to talks with various media companies about providing an online subscription service for TV shows. Reuters is reporting that Microsoft has been in talks with potential partners for over a year now, and was looking to get a service out to customers in the coming months.

It is now thought that Microsoft is thinking again about any such service because the licensing costs are too expensive for the service that the company was planning on. Early versions of the service had a number of features that took advantage of the Kinect and allowed channels to be changed via voice and motion control.

Microsoft wants to provide a service similar to Netflix where users would have the option of paying a monthly fee, and have access to content besides a cable or satellite TV company. But Microsoft wanted to offer customers current shows and live networks as part of its service, which would had made the costs much more expensive.

The company is said to be still working with the TV industry to provide shows over the web via the Xbox to customers of cable services. It recently revealed a number of new apps for its Xbox Live service from the likes of Fox News, Fox Broadcast, and News Corp among others.

It is still hoped that Microsoft will restart the talks sometime in the future, as the likes of Amazon and Google try to make an impact on the US cable TV ecosystem. These companies are playing catch up to Netflix that has over 23 million users in the US, and has recently launched in the UK.

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  • Is this speculation or based on something more substantive?  While licensing costs would have to be a consideration, so too could there be evolutionary developments within Microsoft.  Obviously, the recent keynote announcements by Steve Ballmer at CES 2012 show what appears to be a synergistic relationship between Microsoft and the FOX/Murdoch media empire. Partnering with those who own the licensing rights may be the work around licensing costs.