Microsoft Will Drive Entertainment Shift with Xbox Live TV

I have some bad news for traditional TV networks and cable TV providers—there is this little thing called the Internet that is coming to drive you to extinction…at least as we now know you. Rumors are swirling that Microsoft is seeking a TV exec to help put a nail in that coffin.

Microsoft just rolled out an update for its Xbox Live dashboard that continues the evolution of the gaming console into a one-stop entertainment hub. Sure, you can still play Halo or Madden Football, but you can also watch movies on Netflix, do social networking on Facebook and Twitter, or watch TV content from ESPN, Hulu, and other sources. If you really want to do things the old-fashioned way, you can also use the Xbox console as a DVD player.

Xbox is a streaming media hub, not just a game console.
It’s not quite right yet, though, because the traditional networks and content providers don’t quite get it. For example, Verizon FiOS content is now available through the Xbox, but only for customers who are existing customers of both the Verizon FiOS TV and Internet services.

What’s the point? The same situation exists with services like HBO’s HBO Go app. Sure, it is nice to be able to watch HBO movies and shows on an iPad, but why should you have to be a cable subscriber first to earn that privilege?

Some magazine and newspapers are using a similar backwards approach to delivering content on the Internet or mobile devices. Just subscribe to the old, dead tree, version and have it mailed to your home, and you too can access the digital content for “free”. It is silly.

The line between movies, TV shows, books, magazines, and other forms of entertainment and information are all blurred. With the shift from analog to digital, it is all just ones, zeros, bits, and bytes. If you can get all of the content delivered wirelessly to a tablet, or over broadband to a game console, you don’t really need to have traditional cable TV service at all any more.

Unfortunately for consumers, the cable TV providers that are threatened by the coming shift are also the major Internet service providers--giving them significant power to wield when it comes to squashing streaming entertainment media. By throttling data, capping bandwidth, and billing based on usage, or charging excessive fees for going over data limits, the cable TV providers--I mean ISPs--can make streaming media from the Internet much less appealing, or even cost prohibitive.

I would caution them from taking that route. Just look at the music industry. The record labels were able to effectively crush Napster, but they weren’t able to stop the momentum behind the shift that Napster initiated, and they have struggled to evolve and adapt to the digital music age.

Resistance is futile. Cable TV will be assimilated. Better to recognize and embrace that now, and ride the wave rather than being crushed by it.

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