Microsoft Reportedly Moving To Build a Pay-TV System

Eager to break into lucrative web-based pay TV, Microsoft has held discussions with television networks and other media companies about developing a system to stream programs via its devices and software, company sources have told Reuters. The new venture would compete with Google TV, Apple TV, and Netflix, which already stream TV shows and movies.

Microsoft’s system isn’t likely to be available for at least a year, the unnamed sources told Reuters as the international news agency’s Global Media Summit began Monday. The summit continues through Thursday with events in New York, London, Paris, Mumbai, India and Taipei City, Taiwan.

Multiproduct Approach

Pay TV is a lucrative field because of the ability to generate income both from carrier fees and advertising.

A Microsoft TV service would utilize Xbox Live, which already carries Disney’s ESPN sports network, and could also include tablet computers and phones that run on the Windows Phone 7 mobile operating system. “I think it will cut across Microsoft’s client products and likely include PCs as well as embedded offerings like Windows 7 Embedded with Media Center as well as Windows Phone 7,” said Rob Enderle, principal technology analyst at the Enderle Group.

Microsoft has already laid the groundwork for TV viewing through the Xbox with its fast-selling Kinect motion controller, which allows channel selection and volume control as well as playback control with voice and gestures.

In addition to a direct Microsoft subscription, the Xbox could also be configured to stream content from a provider to which a viewer already subscribes, the Microsoft sources told Reuters.

Microsoft’s TV venture could have an edge over rivals, Enderle said, because its “technology is actually vastly more mature. It is their technology that runs AT&T U-Verse, and they have been working on products in this class for over a decade.”

U-Verse offers digital TV and DVR, phone…

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