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Originally published Tuesday, November 7, 2006 at 12:00 AM

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Microsoft to offer movies via Xbox starting Nov. 22

Microsoft is the latest company to jump into the business of downloadable movies and television shows, but it's using a device no one else...

Seattle Times technology reporter

Microsoft is the latest company to jump into the business of downloadable movies and television shows, but it's using a device no one else has: the Xbox 360 video-game machine.

It announced plans to offer movie rentals and full purchases of television shows, joining Apple Computer, Amazon.com and other rivals in vying for the "what do you want to watch tonight?" entertainment dollar.

The service is to begin Nov. 22, the one-year anniversary of the Xbox 360.

Other companies mostly download videos to the personal computer and have struggled to find ways to easily move that content to the television screen. Although there are cables that connect a PC to a television, buying and using them can be a barrier for consumers.

Microsoft avoids that by going straight to the Xbox 360 with its content.

Console owners with a broadband Internet connection can download the videos directly to the 20-gigabyte hard drive on the Xbox 360, which already is connected to a television in most homes.

The service also stands out because it offers videos in standard-definition and high-definition formats.

Xbox chief Peter Moore says that if nothing else, it will help position the 360 as an entertainment device that can appeal to each family member. If you're not a hard-core gamer, you can still find a reason to keep the system in your living room.

Although prices haven't been revealed, Microsoft said high-def videos will cost more and take longer to download, perhaps even overnight.

Users will pay for the videos with the points system Microsoft already has to sell video-game features and other content to Xbox 360 owners. A user can buy a block of points online with a credit card or through the prepaid cards sold in stores.

The Xbox service doesn't have the vast library of TV content that Apple sells on its iTunes Music Store, nor does Microsoft have the partnerships Apple has with the ABC and NBC television networks.

But that will change, Microsoft executives said.

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By year-end, the service is to have at least 1,000 hours of television programs and movies from partners that include the CBS and MTV networks, Turner Broadcasting System, Paramount Pictures and Warner Bros. Home Entertainment.

Microsoft will sell TV shows such as episodes from the "CSI" series, but it will only rent movies. That differs from Apple, which only sells videos to keep permanently.

The terms of use for rentals are more rigorous than those offered by competitors. Once a user downloads a movie, for example, it must be watched in the next two weeks before becoming unplayable.

Movielink, a competing service, allows 30 days to watch a movie rental.

And once a movie starts playing on either service, there is only 24 hours to watch it. To extend that time, users need to pay more.

Hollywood has demanded those terms mainly in hopes of combating piracy and other illegal use of its movies.

Microsoft and analysts say the industry could relax the regulations if it finds online movie services secure enough.

Richard Doherty, an industry pundit with the Seaford, N.Y., firm Envisioneering, called Microsoft's service a win-win for the company and for program providers.

Many Xbox 360s are in homes with broadband links but not set-top boxes used to access on-demand video from cable companies.

The audience of Xbox 360 owners — often teens and young adults — is a desirable demographic for movie studios and television networks, Doherty said. "It's the right folks and the right eyeballs."

But the 20-gigabyte hard drive Microsoft sells with the Xbox 360 is not big enough to hold the kind of content available on the service. That hard drive could store only about 12 to 15 hours of high-definition video, Doherty said.

He predicted Microsoft will soon announce larger hard drives for the console, perhaps at the Consumer Electronics Show in January.

Kim Peterson: 206-464-2360 or kpeterson@seattletimes.com

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