Microsoft scuttles plans for TV subscription service over high fees

Microsoft scuttles plans for TV subscription service over high fees

Summary: There's been talk that Microsoft was working on a TV subscription service that would let consumers bypass pay TV providers and watch live programming on their Xbox 360 or other device. According to Reuters, that chatter was accurate, but any hopes viewers would have about a Microsoft TV have been dashed, as the tech Goliath has put the idea on the back burner.

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There's been talk that Microsoft was working on a TV subscription service that would let consumers bypass pay TV providers and watch live programming on their Xbox 360 or other device. According to Reuters, that chatter was accurate, but any hopes viewers would have about a Microsoft TV have been dashed, as the tech Goliath has put the idea on the back burner.

As you might have guessed, Microsoft has temporarily abandoned the idea after the fees requested by TV networks proved too costly. That spoiled the company's plans to offer a monthly subscription service that might have included voice and motion control of your viewing choices. Instead, Microsoft continues to add streaming services to its Xbox Live platform, including those from cable companies themselves.

Microsoft's experience could help explain why we're still waiting for an Apple TV to hit the market. If Apple wants to create a similar ecosystem as was envisioned with Microsoft TV, it will need to wrangle with the various -- and no doubt costly -- fees that channels will insist on in order to allow their programming to be available outside of a cable or satellite provider's set-top box.

Topics: Hardware, Microsoft, Mobility

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  • RE: Microsoft scuttles plans for TV subscription service over high fees

    At least this time I cannot find fault with Microsoft, as the cable company around here is worse than Microsoft, when it comes to pricing. For a decent HD package with a few non optional channels (History, True TV, HBO, etc) the price is well over $120 a month.
    Rick_Kl
  • And don't forget what could happen to your broadband service bill.

    When large numbers of subscribers start canceling their premium cable services and upgrading their broadband service, it won't take Cable companies long to respond. They'll hike prices, enact [stricter] data limits, throttle more users, and surely reword their TOS agreements to discourage subscribers from getting their content from 3rd parties.
    matthew_maurice
    • Coming to a residence near you soon

      @matthew_maurice <br>[i]When large numbers of subscribers start canceling their premium cable services and upgrading their broadband service, it won't take Cable companies long to respond.[/i]<br><br>This migration has already started, in ever widening numbers. C'est la vie. Let the inexorable fallout begin.
      klumper
  • RE: Microsoft scuttles plans for TV subscription service over high fees

    PS3 has Mubi and Quickflix. The streaming movie service of both is really quite poor. If XBox was only going to get the same, then XBox users have missed-out on nothing.
    Wakemewhentrollsgone
    • RE: Microsoft scuttles plans for TV subscription service over high fees

      @Habiloso
      I just use Zune Market to rent and buy movies. They stream just fine in full HD on a DSL 1.5Mbps connection.
      OhTheHumanity
      • RE: Microsoft scuttles plans for TV subscription service over high fees

        @OhTheHumanity <br><br>Sorry, i misled you. When I talked about the service being poor, I meant the selection of movies. Like you, I've no problems with the streaming itself and that works quite well. The problem is the poor selection of movies able to be streamed from Mubi and Quickflix. Quicklfix recently had an offer of $5.00 per month for 3 months for their streaming service in Australia. Even at that price its not worth the money!
        Wakemewhentrollsgone
  • RE: Microsoft scuttles plans for TV subscription service over high fees

    If the content providers have their way, there will never be a Apple iTV. There is simply too much money to be made with the current pricing under the current system.
    mstrsfty
    • RE: Microsoft scuttles plans for TV subscription service over high fees

      @mstrsfty Apple fans loyalty has always trumped very high prices, why would it be different here?
      edkollin
      • RE: Microsoft scuttles plans for TV subscription service over high fees

        @edkollin
        Yes, like spending $2k for an Apple tablet until MS showed them how to do it right with more reasonable prices.
        anono
  • RE: Microsoft scuttles plans for TV subscription service over high fees

    I work for a major broadband company. Cable companies are often criticized for prices and price hikes. But most people don't realize these increases are due to increased programming costs charged by networks. About one half of your cable bill is programming costs (seriously). Some of the charges are absurd. A very popular sports network probably holds the record as having one of if not the highest fees which is "several" times higher than most others, but you are forced to carry it because of subscriber demand. And you can't necessarily pick and choose. A lot of networks come in groups so you have to take them together or not at all. You also can't put high-cost networks in a special tier so that subscribers who aren't interested in that channel can avoid it and pay for a cheaper package. Most companies would get rid of video all together if they could as residential and commercial internet and telephony is now their bread and butter. Cable companies are a punching bag but the general public doesn't really understand. Looks like Microsoft got a quick tutorial.
    zholley
    • RE: Microsoft scuttles plans for TV subscription service over high fees

      @zholley I'm assuming Apple got a quick tutorial as well seeing as they're taking a long time to come out with their own service as well.
      smulji
    • RE: Microsoft scuttles plans for TV subscription service over high fees

      @zholley

      Only 50% of the cable bill is programming, doesn't seem bad to me since without it the cable company wouldn't exist. I still remember when you could get all of this programming for free with your own satellite in your backyard until the cable companies started paying the providers to scramble their signals so you would be forced to buy their service. There used to be people selling satellites everywhere, but the greedy cable cos. knew they could not compete with just the one-time cost of a satellite and they starting paying the providers to scramble their signal. Now if you find someone with a satellite they'd give it to you for free, because it is worthless. So don't give me this mess about the poor innocent cable cos. they deserve whatever they get, because it was their greed that got us and them into this mess. We're the victims, just because you work for the 'MAN' and have to put up with him that's your problem.
      alphaxi3
      • RE: Microsoft scuttles plans for TV subscription service over high fees

        @alphaxi3

        No 50% is not bad since all my coworkers and I agree to work for free. Oh, and all the miles of fiber optic and coax were DONATED by kind-hearted people willing to pitch in to give America HD TV with Video on Demand. Did I mention we have no utility bill, or no pole attachment or maintenance fees? When the trucks hit 100,000 miles we simply go to the dealer and pick out new vehicles - FREE!!! Then we stop at the gas pump and fill them up... you guessed it - free again!! We're also exempt from any FCC or Sarbanes-Oxley compliance.
        Satellite worthless? Maybe you could pay for programming to get it to work. And to think we could have all had a one-time cost of a big C-band dish and the networks would have continued to work their asses off to provide us with free programming for life. What a novel concept! Just because you were able to receive satellite "feeds" for free years ago doesn't mean the networks think you were entitled to them. HBO, the first to scramble their signal in 1986, probably had just a little bit invested to get it off the ground don't you think? They didn't name it UNICEF TV.
        Since a lot of people think that TV programming is some sort of right, maybe we can get Uncle Sam to take over and slide it in with some health care legislation. Damn everybody for charging money for things when it should all be free!
        zholley
    • A la carte offerings

      @zholley
      [i]And you can't necessarily pick and choose. A lot of networks come in groups so you have to take them together or not at all. You also can't put high-cost networks in a special tier so that subscribers who aren't interested in that channel can avoid it and pay for a cheaper package.[/i]

      Appreciate your comments. However, if cable companies don't rethink their longstanding bundled package policies, they may antiquate themselves in the near future. That old AIO gravy train M.O. is slowly grinding down. The attraction of the future lies in a la carte menus, or WWW alternatives will likely fill that space.

      Question is, will they adopt/adapt in time to save their bacon? That includes pressuring those on the programming side to wake up likewise. It may soon become a sink or swim proposition.
      klumper
      • a la carte not feasible

        @klumper <br><br>a la carte is a wonderful idea but it is not practical. Here's why:<br><br>To make an easy illustration, let's assume every network charges the cable company the exact amount per sub. Let's say that is $0.60 per subscriber for a good average. <br>Let's also say the cable company tacks theirs onto it making it $1.20 per subscriber, per channel, per month. Assume we have an imaginary package of 55 channels similar to a basic package. 55 x 1.20 = $66. $66 multiplied by an imaginary small subscriber base of say only 15,000 subs. 66 X 15000 = $990000 revenue for that month required to maintain the system and sustain a profit.<br><br>Now assume everyone wants only their favorite 3 channels a la carte instead.<br>3 X 1.20 x 15000 = $54000 or about a $936,000 deficit per month to maintain the same infrastructure. Sorry. Not my choice either but this ain't gonna come anywhere close to happening. You'll never get a cable package for $3.60/mo. It's not doable. The networks aren't gonna bend over anyway. They would simply jack prices per sub up - WAY up.<br><br> "a la carte" is basically another "I want it for basically nothing" thing. There is no thought put into this concept - unless the plan is to somehow let local gov't buy out the cable company and fund it with a SPLOST or something (damn I opened my mouth).<br><br>Cable companies DO pressure networks - all the time. Even Dish has had standoffs and shut channels down because a deal couldn't be negotiated. And what's worse is the local stations have gotten wise and cocky, getting every dime they can even though you can pick them up with a fricken antenna.<br><br>Any business is going to adapt to maintain their level of compensation. Looking at it from a consumer's point of view: if you think the jar of mayonnaise in the grocery store is to expensive and not a good value, you don't buy it. If cable is not a good value for you, don't gripe. Just don't buy it. It's not electricity. You have a choice of providers or a choice not to have it at all.
        zholley
      • Things are changing nonetheless, like it or not

        @zholley

        As more everyday Joe's get wise to the tired, stale racket they're helping subsidize. This transition is already occurring, and I see no end in sight unless the cable companies - and the entertainment industry at large - rethink their strategies. [Just as the music industry is discovering, almost painfully now]

        Other things are driving this transformation beyond the escalating costs of the goods. Lousy, LCD programming, i.e. the sheer overload of nonsensical, in your face, "sensationalist" (read: audacious, crude, insulting) material, along with ever-increasing commercial advertisement ratios.

        As it is, I'm not sure if commercials make up more of each hour of TV in the US, or actually program material! That alone is outrageous, and a far cry from how things were years ago in the broadcast industry.

        All this has been done simply to allow Hollywood - the producers and players and financiers - to stuff obscene amounts of profits into their collective pockets. Of course they don't want to change their pilfering ways!

        [i]"a la carte" is basically another "I want it for basically nothing" thing. There is no thought put into this concept...[/i]

        Hardly, as that could always be coupled with minimums, ideally reasonable ones, whereby some degree of volume is retained but customer choice is enhanced. As something of a bonus, this would invariably help to hem in a lot of subpar programming, by allowing it to die on the vine quicker.

        Tough choices I know, but if not expect an ever widening desertion from the status quo. You heard it here first.

        [i]If cable is not a good value for you, don't gripe. Just don't buy it. It's not electricity. You have a choice of providers or a choice not to have it at all.[/i]

        And that's just what's happening. I've already made the transition - a number of years ago to be precise. ;)
        klumper
    • RE: Microsoft scuttles plans for TV subscription service over high fees

      @zholley

      No 50% is not bad since all my coworkers and I agree to work for free. Oh, and all the miles of fiber optic and coax were DONATED by kind-hearted people willing to pitch in to give America HD TV with Video on Demand. Did I mention we have no utility bill, or no pole attachment or maintenance fees? When the trucks hit 100,000 miles we simply go to the dealer and pick out new vehicles - FREE!!! Then we stop at the gas pump and fill them up... you guessed it - free again!! We're also exempt from any FCC or Sarbanes-Oxley compliance.

      And I care because? Oooohh, that's right I am supposed to feel sorry for the poor cable cos. because they DESERVE a return on their investment. What about the investment those people made on the satellites they purchased to view the programming the networks were happy to transmit making a profit from the advertisment dollars they made until the greedy cable cos. decided that they deserved a cut and paid the networks to scramble their signals. Oh yeh scr3w them, they should not have brought them in the first place.

      Satellite worthless?

      Clearly this one went right over your head and you are probably to young to remember when a person could purchase their own satellite to view these programs which were being broadcast to everyone without the use of a cable co.

      Maybe you could pay for programming to get it to work. And to think we could have all had a one-time cost of a big C-band dish and the networks would have continued to work their asses off to provide us with free programming for life. What a novel concept! Just because you were able to receive satellite "feeds" for free years ago doesn't mean the networks think you were entitled to them. HBO, the first to scramble their signal in 1986, probably had just a little bit invested to get it off the ground don't you think? They didn't name it UNICEF TV.

      Yeh, and the innocent cable cos. had nothing to do with this change. Next time get a clue.

      Since a lot of people think that TV programming is some sort of right, maybe we can get Uncle Sam to take over and slide it in with some health care legislation. Damn everybody for charging money for things when it should all be free!

      I have no problem with paying for anything. I just have a problem paying for something that the provider had no problem with the money they were making providing the service for free until some greedy corporation decided that they DESERVED to make a cut and made backdoor deals with cos. so everybody will have to pay them to now receive. Maybe you are that foolish, but I am not. Hey I understand you are part of the system that profits from this and I expect you to be ok with the scam.
      alphaxi3
  • RE: Microsoft scuttles plans for TV subscription service over high fees

    We need somebody like Magic Jack to come in a give us a deal like they do with the telephone service only $19.99 a year
    waynepage44@...
  • Who Needs Any Of It ?

    Over The Air is still free and how many hours of television do you watch any way ?
    Last year we decided to add them up in our house and our total for the year was 121 hours, so never having shelled out for cable tv we do not miss it at any way.
    The monitor when it is on is used more fore the PC than anything else.
    "waynepage44"
    "We need somebody like Magic Jack to come in a give us a deal like they do with the telephone service only $19.99 a year ."
    Where are they going buy the programs, you seem to have missed the point of the article.
    Don544